Are REITs Like Bonds: Why or Why Not? With the Federal Reserve finally beginning to raise short-term interest rates from the historical lows over the last several years, we may want to compare REITs to bonds and consider the ways in which investor returns from nontraded REIT investments may resemble returns from bonds. Just as importantly,…

Capitalization Rates Recapped in Today’s Market Environment In an Insights article on the Blue Vault website in September, 2015, we defined capitalization rates and explained how they relate to values at the property level and the portfolio level. Real estate investments produce income available to investors in the form of NOI, or Net Operating Income.…

Although still not as widely used in the financial services sector as nontraded REITs, BDCs and mutual funds; interval funds and nontraded closed-end funds are growing quickly. Why are they gaining popularity? Perhaps if we define and differentiate these fund types, we can better understand the answer to that question.

Economies of Scale in Nontraded REIT Offerings and Effects of Fee Discounts Two complicating factors that must be considered in the analysis of fees associated with nontraded REIT offerings are: Economies of scale resulting from that portion of fees and/or expenses that are fixed or constant over a relevant range of offering proceeds Selling commission…

After the publication (published July 18, 2016) of our recent Insights article on auction sites for nontraded REIT shares, we received requests for more information about other options for investors. We have updated our listing to include several other potential contacts for investors seeking competitive pricing for shares in secondary markets. These companies include a…

A third-party due diligence firm is an essential tool in helping a Broker Dealer evaluate a product sponsor as part of its due diligence on the sponsor’s alternative investment offerings. As part of the process, the Broker Dealer obtains an investment research report produced by the third-party due diligence firm to aid their evaluation. This…

You may have heard the term “interval fund” frequently over the past couple years. Many broker dealers have recently brought interval funds onto their platform as of late. Much more education needs to happen in the marketplace to understand interval funds and how they work. We will delve into the terminology surrounding these newly popular…

Shareholders in nontraded REITs have limited options when attempting to liquidate some or all of their common stock holdings. While most nontraded REITs have share redemption programs, these programs may have been suspended due to liquidity issues, or restricted to redemption requests filed due to death, disability or other hardships. Funding for share redemptions is…

REIT investors may have seen the term “capitalization rate” used in discussions of individual real estate property acquisitions and valuations and even in the broader market context when comparing investor expectations and property portfolio values. In this article we explain what capitalization rates or “cap rates” are and what they aren’t, and how nontraded REIT…