SLCG Economic Consulting's Logo

Resources

Blog

Our experts frequently write blog posts about the findings of the research we are conducting.

Filter by:

Displaying 21-30 out of 55 results for "Non-Traded REITs".

BlueVault Partners' Non-Traded REIT Study: Even the Winners do Worse Than Traded REITs

We have noted in our research and our posts that non-traded investments including non-traded real estate investment trusts (REITs), business development companies (BDCs), oil & gas and equipment leasing partnerships typically have extremely high upfront and ongoing fees. Because of these high costs, illiquidity, lack of transparency and conflicts of interest, these investments should underperform liquid, lower-cost traded investments with similar underlying exposures. For example, non-traded...

The Inland Group's Non-Traded REITs Destroyed $11.9 Billion of Investor Wealth

Last week we wrote about how investors in a non-traded REIT, Inland Diversified Real Estate Trust, had lost $200 million compared to traded REITs even though it announced a merger with a traded REIT, covered in our blog post"More Non-Traded REIT Carnage: Inland Diversified's Investors Have Lost 40%, Not Gained 31%".

Continuing our blog posts and working papers on non-traded REITs, today we report on how investors fared in five non-traded REITs sponsored by affiliates of The Inland Real...

More Non-Traded REIT Carnage: Inland Diversified's Investors Have Lost 40%, Not Gained 31%

As we have explained in several blog posts and working papers, non-traded REITs are illiquid, poorly diversified real estate investments that destroy investor's wealth compared to liquid, diversified real estate investments.

Inland Diversified Real Estate Trust, Inc. ("Inland Diversified") is a non-traded REIT that invests in retail properties, office properties, industrial properties, and multi-family properties. Yesterday, Inland Diversified announced that it was merging with Kite Realty...

Another Example of Non-Traded REITs' Wealth Destruction: Columbia Property Trust (Wells REIT II) Cost Investors $4.4 Billion

Non-traded REITs are illiquid investments, not listed on public exchanges and with little to no secondary market trading. Their offering documents typically claim that after some period of time, perhaps 5-10 years, the REIT intends to list on an exchange, merge with another company, or in some other way allow investors to sell their shares but for many non-traded REITs, this "liquidity event" never occurs.

However, even if a non-traded REIT lists on a major exchange, that does not mean that...

SEC Examiniation Priorities 2014

The Securities and Exchange Commission (SEC) senior staff recently announced their 2014 examination priorities . The national examination program will be focusing on fraud detection and prevention, corporate governance, and registrants that serve as both a broker-dealer and investment adviser.

SEC staff also plans to undertake initiatives that examine the rollover of retirement vehicles during employment transitions or near retirement. In particular, the staff is concerned about misleading...

Behringer Harvard / TIER REIT Illustrates How Non-Traded REIT Sponsors and Brokers Have Siphoned $10 Billion to $20 Billion (and Counting) From Investors

Sponsors have issued, and brokers had sold, over $85 billion of non-traded real estate investment trusts (REITs) by the end of 2012. These investments are illiquid, high-commissioned, poorly diversified real estate investments. Despite their glaring defects another $20 billion of non-traded REITs were sold to investors in 2013.

Sponsors and brokers have siphoned off at least $20 billion from investors through their sales of non-traded REITs up through 2012. We illustrate the calculation of...

FINRA Regulatory Priorities 2014

Early this month, the Financial Industry Regulatory Authority (FINRA) released their 2014 regulatory and examination proirities . FINRA is continuing to focus on the suitability of recommendations made to retail investors. FINRA specifically mentions complex structured products (including leveraged ETFs), non-traded REITs, frontier funds, and interest rate sensitive instruments such as mortgage-backed securities and municipal bonds. At a recent conference, a FINRA representative added that...

BDCs as the New REITs

Brendan Conway at Barrons had an interesting piece back in September about business development companies (BDCs) and their similarities to real estate investment trusts (REITs). His story highlighted that BDCs in some sense resemble REITs in the 1990s, in that they are considered "previously exotic areas that went mainstream." Indeed, we are seeing more and more coverage of BDCs in the mainstream media, along with the troubling development of non-traded BDCs, just as we have seen non-traded...

Another Non-Traded REIT Lists Shares, Revealing Losses

Shares of non-traded real estate investment trusts (REITs) were sold in large amounts during the real estate bubble of 2005-2007. Without an observable trading price, sponsors simply fixed the share price of non-traded REITs at $10 per share. As real estate markets have collapsed and now begun to recover, it has been difficult to ascertain just how much those $10 shares have changed in value. Non-traded REIT sponsors are now required to estimate per-share net asset values, which have...

SLCG Research: Priority Senior Secured Income Fund

In our experience, retail investors are being sold increasingly obscure and non-conventional investments. An investment that raised our eyebrows recently is the Priority Senior Secured Income (PSSI) Fund. The PSSI Fund is the first regulated investment company that invests primarily in leveraged loans and collateralized loan obligation (CLO) tranches lower in their capital structures.

Unlike the mutual funds with which most retail investors are familiar, PSSI Fund investors are not able to...

55 Results

Display: