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Displaying 31-40 out of 73 results for "REIT".

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

(Feb 2014)

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%

(Feb 2014)

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

(Jan 2014)

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

(Jan 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

(Jan 2014)

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

(Jan 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

(Nov 2013)

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...

FINRA Investor Alert: Closed-End Fund Distributions

(Nov 2013)

The Financial Industry Regulatory Authority (FINRA) recently released an Investor Alert to draw investors attention to the subtle difference between distributions and returns in the context ofclosed-end funds. Closed-end funds are pooled investments like mutual funds (which are also known as 'open-end funds'), but have only a fixed number of shares. This distinction has a big impact on how the fund is analyzed.

Distributions from closed-end funds are typically quoted as a rate (e.g. 6%). This...

The Consequences and Implications of TIC Investments

(Nov 2013)

The research we have outlined all this week strongly suggests that TIC interests are exceptionally poor investments. We have focused our posts on what a thorough due diligence on the TICs should have revealed at the time of issuance. But you may be wondering, what happened to these TICs? What sort of returns did investors receive?

To our knowledge, there is no retrospective study of TIC returns. But in our experience, the vast majority of TIC properties suffered significant impairments during...

Another Non-Traded REIT Lists Shares, Revealing Losses

(Oct 2013)

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...

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