Blackstone Group and Starwood Capital Group's freezes on redemptions at their nontraded REITs grabbed the attention of the commercial real estate industry. Now it has perked the ears of the Securities and Exchange Commission.

The SEC has contacted the two private equity giants about the situation, though it has not opened a formal investigation or made any accusations of wrongdoing, Bloomberg reports. Both Blackstone Real Estate Income Trust and Starwood Real Estate Income Trust only redeemed a percentage of each share repurchase request this quarter after requests exceeded their preset quarterly limit.

The economic downturn that has plagued real estate in the back half of this year is the first sign of trouble nontraded REITs have experienced in their short lifetime.

Nontraded REITs — open-ended investment vehicles that own real estate and allow limited liquidity withdrawals — only came into being in 2015, but quickly became one of the most powerful forces in the commercial real estate investment market.

As real estate prices have plummeted, investors in the two largest nontraded REITs have been trying to get their money out at unprecedented levels. While both report having enough cash reserves to keep redeeming requests up to their quarterly limits for the foreseeable future, they may seek to sell assets to maintain preferred liquidity levels.

If institutional-class CRE's biggest buyers over the past few years switch to sell mode, asset values could face an even steeper drop.

BREIT and SREIT reported their portfolios gaining value over the first three quarters, despite asset values retreating across the broader market. While valuing their properties more highly enables the two funds to meet more share repurchase requests per quarter, it also raises questions about their internal appraisal metrics.

Blackstone's stock value had dropped by nearly 4% through midday on Monday. The SEC's inquiry emerged on Dec. 16.