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Displaying 11-20 out of 66 results for "non-traded REITS".

More Non-traded REIT Perfidy: The Roll-up Grift

We have extensively researched non-traded REITs and concluded that these illiquid direct participation programs have cost investors $50 billion compared to more liquid investments in traded REITs. Our Fiduciary Duties and Non-traded REITs provides a good overview of the problems with non-traded REITs and a summary of our empirical results. An Empirical Analysis of Non-Traded REITs contains a more detailed explanation of our research. See our previous blog posts on individual non-traded...

The Worst Investment in the World! Behringer Harvard's Priority Income Fund

I. Introduction

What could be worse than a non-traded REIT? Well, REIT-sponsor Behringer Harvard has managed to create something even worse than a non-traded REIT: The Priority Income Fund. On May 9, 2013, Behringer Harvard and the manager of publicly traded BDCs, Prospect Capital Management, announced the initial public offering for their new joint-effort Priority Senior Secured Income Fund (PSSI) now renamed Priority Income Fund.i

The best thing that can be said of the Priority Income Fund...

A Non-traded REIT Investor Fights Back

On June 5, 2015, I wrote that American Realty Capital's latest listing of a non-traded REIT was further evidence of the harm caused by sponsors of non-traded REITs. I also pointed out that, contrary to the common pattern in non-traded REIT listings, Schorsch and ARC used their control of the non-traded REIT version of GNL to tie the hands of shareholders and management in the subsequent GNL traded REIT and to opportunistically transfer wealth to themselves. I pointed out that similar...

Nicolas Schorsch and American Realty Capital Lay Another Egg

GNL: American Realty Capital Lays Another Egg

On Tuesday, non-traded REIT American Realty Capital Global Trust Inc. - rechristened Global Net Lease, Inc. - began trading on the NYSE under the ticker GNL. GNL is at least the 42nd non-traded REIT to have listed, or merged into or been acquired by another REIT since 1997 and adds to the mounting wealth toll non-traded REITs have extracted from unsophisticated investors.

My co-authors and I have determined that the non-traded REIT industry has...

Oil and Gas DPPs From Just Two Sponsors Have Caused $3.7 Billion in Losses

We have written extensively about direct participation programs, or DPPs. See our blog posts on non-traded REITs and our discussion about equipment leasing DPPs. Oil and gas DPPs are another strain of the DPP epidemic: illiquid exposure to an existing underlying asset, loaded with confiscatory fees, conflicts of interest and unnecessary risk.

Oil and gas DPPs use some of investors' money to drill and operate oil and gas wells. Oil and gas DPPs are sponsored and managed either by investment...

Equipment Leasing DPPs

We've written extensively about the evils of non-traded REITs. You can read through our other non-traded REIT blog posts. As bad as non-traded REITs are - and they're so bad no one should ever buy one - registered, non-traded Equipment Leasing Direct Participation Programs (DPPs) are worse.

Examples of equipment leasing DPPs include the series of LEAF and ICON trusts we discuss below. Equipment leasing DPPs provide a stark illustration of the DPP deceit which infects non-traded REITs,...

Monogram Residential Trust's Proposed Listing is Further Evidence That Even the Non-Traded REITs Winners Are Losers

The non-traded REIT, Monogram Residential Trust, rebranded from the Behringer Harvard Multifamily REIT I this April, is "exploring a potential listing on a national securities exchange", Monogram's CEO Mark Alfieri wrote in a letter to investors last month. Monogram's managers and senior advisors are optimistic that such a liquidity event will "maximize shareholder value". They claim that the REIT's main problem has been a lack of monetization. We disagree.

We have analyzed all of Monogram's...

United Development Funding IV Left Investors $34.8 Million Worse Off

On Wednesday last week, another non-traded REIT listed on a public exchange. United Development Funding IV (ticker: UDF), which sold as a non-traded REIT for $20 per share, closed its first day of trading on the NASDAQ at $19.60. As we have argued extensively in the past, we think that non-traded REITs are a very bad deal for investors, and UDF IV was no exception.

We have gone through all of UDF IV's SEC filings and applied the gross proceeds, distributions, and other cash flows to a liquid,...

FINRA Enforcement Actions: Month in Review

MAY 2014 SELECTED FINRA ENFORCEMENT ACTIONS

FIRMS FINED

ABN AMRO Clearing Chicago LLC (CRD #14020, Chicago, Illinois)

ABN AMRO Clearing Chicago LLC consented to a censure and $95,000 fine for allegedly failing "to report short interest positions to the New York Stock Exchange and FINRA on certain settlement dates, and submitt[ing] to FINRA an inaccurate short-interest position report." FINRA found that the firm's supervisory system did not provide for supervision reasonably designed to achieve...

Non-traded REITs' Annualized Returns Were 4.82% Compared to Traded REITs' 10.44%.

We have posted previously about how non-traded REITs which have had "liquidity events" have destroyed $27.7 billion in investor wealth compared to traded REITS. See our other blog posts on Non-Traded REITs. In this post, we calculate that the 27 non-traded REITs we discussed in prior posts have an internal rate of return (IRR) of 4.82%, which is 5.62 percentage points lower than the 10.44% IRR of a liquid, diversified REIT mutual fund over the same time period, with the same cash flows.

To...

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