Green Street Advisors – the “industry leader in REITs research” -recommends against investing in non-traded REITs. Investors who want exposure to the real estate market would be better off investing in publicly traded REITs, according to a report issued by the firm. (“Non-traded REITs should be a nonstarter for clients: Green Street,” InvestmentNews).
Investor losses connected with improper due diligence and overvaluation, high fees, and misleading dividend payouts, have given the industry “a black eye” and led to lawsuits by regulators and investors.
The claimed share-price stability, which is a major attraction to investors, is an illusion, according to the article, citing Green Street.
“Since the shares don’t trade, the share price investors see on their statements every quarter doesn’t fluctuate,” Green Street was quoted as saying. Statements sent to customers reported the value of the REIT as the purchase price even though the underlying real estate had declined in value.
In addition, “egregious” upfront costs of 7% to 10% further eroded returns on non-traded REITs. Dividends were often paid from loans or investors’ capital.
In short, non-traded REITs are another example of alternative investments that investors should avoid.
The most important of investors’ rights is the right to be informed! This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over , Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Robert Wayne Pearce
Robert Wayne Pearce of The Law Offices of Robert Wayne Pearce, P.A. has been a trial attorney for more than 40 years and has helped recover over $125 million dollars for his clients. During that time, he developed a well-respected and highly accomplished legal career representing investors and brokers in disputes with one another and the government and industry regulators. To speak with Attorney Pearce, call (800) 732-2889 or Contact Us online for a FREE INITIAL CONSULTATION with Attorney Pearce about your case.
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