How might an investment in a joint venture by a nontraded REIT represent increased leverage for its shareholders? Answer: If a joint venture investment includes the use of debt within the structure of the joint venture, the effective leverage for nontraded REIT investors is the combination of the debt used by the nontraded REIT and…

How do nontraded REIT sponsors become eligible for “Subordinated Performance Fees”? Answer:  If the REIT achieves a non-compounded average rate of return for shareholders in excess of a stated benchmark (typically 6% or 7%) or hurdle rate, the sponsor is entitled to a share of the excess, typically 15%.  This performance fee does not have…

Blue Vault is pleased to release the Q4 2016 Industry Sales Summary report… outlining 4th quarter 2016 capital raise data, as well as total 2016 yearly capital raise data. Capital raise is broken down by industry, sponsor and REIT offering, and evaluated by year, dating back to 1990. We hope you enjoy Blue Vault’s expanded…

What is “LIBOR” and how does it relate to the cost of debt for nontraded REITs? Answer: Many nontraded REITs have debt with interest rates that are set to vary with “LIBOR”, the London Interbank Offered Rate. It is the benchmark rate that some of the world’s leading banks charge each other for short-term loans.…

With a sliding scale of selling commissions for volume purchases of nontraded REIT shares, what happens to the net proceeds per share when selling commissions fall? Answer: Net proceeds per share remain the same as selling commissions fall because the effective purchase price per share falls with the selling commissions  

One nontraded BDC produced a total return of an astounding 28% in 2016, find out who.  Answer: FS Energy and Power Fund’s total return for 2016 was 28%. Learn more about FS Investments on our Sponsor Focus page.  Click Here

Which expense as a percentage of proceeds related to a nontraded REIT public offering goes up dramatically for a typical offering when the offering falls far short of its goal? Answer: Organization and Offering Costs have exceeded 4.0% of offering proceeds for small NTR offerings in the past.

Which basis for calculating Asset Management Fees results in higher costs to nontraded REITs when leverage is increased: Aggregate NAV or Gross assets? Answer: Gross assets

Did you know that Blue Vault releases individual nontraded REIT pages (performance pages) as they are completed by Blue Vault. We do not wait to complete the full quarterly NTR Review (approx. 95 pages) until every piece of the Review is completed. By doing so, we can get individual REIT offerings and their quarterly performance…