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

Displaying 10 out of 62 results for "Non-Traded BDCs".

Blackstone Fiddles as BREIT Burns

(Apr 2023)

By Craig McCann and Regina Meng.

You can download a pdf of this article to print or email here.

Introduction

In December, we argued that Blackstone Real Estate Income Trust ("BREIT") smoothed and inflated its reported returns for years, leading to large investor inflows. [1] We predicted that a run on the bank had started because of Blackstone's prior conduct, leaving it with two very bad options. BREIT could honor redemption requests at posted NAVs and see its NAV cut in half as the NAV...

Blackstone's Choice: Let BREIT Crash or Collapse It Slowly?

(Dec 2022)

By Craig McCann and Regina Meng.

Introduction

Last week, Blackstone Real Estate Income Trust ("BREIT") announced that it was not going to honor redemption requests from investors in excess of 2% per month and 5% per quarter. In response, Blackstone's stock price fell 7% the first day and another 7% over the following week.

In this note, we explain how BREIT smoothed and inflated its reported returns for years, leading to extraordinary accolades, a prominent role in important regulatory...

First National Realty Partners Reg D Offerings: Muppets Do Commercial Real Estate

(Dec 2022)

By Craig McCann, Susan Song, Chuan Qin, and Mike Yan.

You can read our previous posts Reg D offerings:

1) "Reg D Offerings Summary Statistics" here,
2) "$8 Trillion of Broker-Sold Reg D Offerings" here,
3) "HJ Sims Reg D Offerings: Heads Sims Wins, Tails their Investors Lose" here, and
4) "Inactive and Delinquent Reg D Issuers" here.

You can download and print or email this post by clicking here.

Introduction

In a recent note, we explained how HJ Sims executives formed 91 separate...

Regulation D Offerings Summary Statistics

(Aug 2022)

By Craig McCann, Chuan Qin and Mike Yan.

I. Introduction

Securities issuers can either register their securities with the Securities and Exchange Commission, making extensive information about their business and the offering publicly available, or they can sell unregistered securities making almost no information available to regulators. Issuers of unregistered securities file Form D reports with the SEC on which the issuers provide cursory information and claim an exemption from...

Non-Traded REIT Conflicts Run Amok: VRM I, VRM II and MVP, MVP II

(Apr 2017)

Introduction

SLCG has written extensively about pervasive conflicts of interest in non-traded REITs arising because a non-traded REIT's sponsor, advisor, selling agents, and major suppliers are often affiliated entities that benefit more from creating the non-traded REIT than from running the REIT profitably. See our blog posts on REITs. SLCG economists have also published peer-reviewed articles on non-traded REITs, including An Empirical Analysis of Non-Traded REITsⁱ.

A collection of...

More on the Sordid Tale of the Global Net Lease and ARC Global Trust II Merger

(Sep 2016)

On August 11, 2016 we wrote about the recently announced merger of Global Net Lease, Inc. (GNL) and American Realty Capital Global Trust II (ARC Global Trust II). See Sacha Baron Cohen and Nicholas Schorsch - Masters of the House! ARC Global Trust II's 8-K announcing the merger (see the merger agreement).

Global Net Lease had been non-traded REIT ARC Global Trust Inc. but began trading on the NYSE under the ticker GNL on June 2, 2015. Read our full June 5, 2015 blog post on ARC Global Trust /...

Sacha Baron Cohen and Nicholas Schorsch - Masters of the House!

(Aug 2016)

On Monday, Global Net Lease, Inc. (GNL) and American Realty Capital Global Trust II (ARC Global Trust II) announce a merger. Under the agreement, ARC Global Trust II shareholders will receive 2.27 shares of GNL for each share of ARC Global Trust II common stock they own, which implies $19.59 per each share of ARC Global Trust II share based on GNL's closing price as of August 5, 2016. See ARC Global Trust II's 8-K announcing the merger and merger agreement.

It's a sordid tale, worthy of a...

A Bad Broker Found His Firm; You Should Avoid Them Both

(Jun 2016)

In June 2016, a FINRA panel in Albuquerque, NM ordered Centaurus Financial, Inc. to pay the Claimant, a recent widow when the subject conduct began, $150,000 plus all hearing fees after reasoned findings that "the investments Hashemian recommended while at Centaurus were not suitable", that Centaurus was responsible for Hashemian's actions which "constituted fraudulent and negligently made misrepresentation and omitted material information in the sale of investments" and that "Centaurus...

Nicholas Schorsch Cheated Investors in Recent Nontraded REIT Mergers

(Dec 2015)

Roll-ups

Recently we posted More Non-traded REIT Perfidy: The Roll-up Grift.

To re-cap: Non-traded REITs are required by state securities regulators to include language in their bylaws which closely tracks the 2007 North American Securities Administrators Association's Statement of Policy Regarding Real Estate Investment Trusts.¹

NASAA guidelines protect shareholders in REITs which have not been trading for at least 12 months before being rolled-up. The protections include the requirement...

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

(Nov 2015)

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...

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