The recent surges in withdrawal requests at Starwood and Blackstone, and the decisions by both to limit redemptions, may be signs less of an issue the non-traded REITs faced and more of a deeper problem. Rather than a pair of curiosities, they might represent the surfacing of a previously invisible developing systemic issue.

Blackstone CEO Stephen Schwarzman spoke about the situation this week, according to the Financial Times. "'The idea that there is something going wrong with this product because people are redeeming is conflating completely incorrect assumptions,' Schwarzman said at an industry conference. 'This was not meant to be a mutual fund with daily liquidity. These are pieces of real estate.'"

Starwood's CEO, Barry Sternlicht, also addressed the restriction this week, as The Real Deal reported. "'We're not a hedge fund. We can't liquidate our properties overnight at attractive prices,' he explained. 'We have to manage liquidity.' Sternlicht was speaking with Newmark president Jimmy Kuhn at New York University Schack Institute's capital markets conference at the Pierre Hotel Tuesday as the biggest non-traded REITs move to curb a surge of withdrawals."