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SEC INVESTOR BULLETIN ON NON-TRADED REITS

Posted by: Robert Rex
January 06, 2012
Topic: REAL ESTATE INVESTMENT TRUSTS - REITS

The Securities & Exchange Commission issued an Investor Bulletin describing the necessary qualifications of a real estate investment trust, commonly referred to as a REIT. That bulletin may be read in its entirety at:

 http://www.sec.gov/investor/alerts/reits.pdf

REITS may be publicly traded or non-traded (private). As suggested by the name, publicly traded REITs trade on national exchanges and non-traded REITs do not. Non-traded REITs may not be liquid and may be difficult or impossible to value. Sales commissions on non-traded REITs are generally substantially higher than for traded REITs. The lack of liquidity, lack of share transparency, the significant up-front fees, the fact there are often conflicts of interest between the REIT and related parties and the fact that distributions may be paid from offering proceeds or borrowing make the purchase of non-traded REITs somewhat more risky than other investments.

Recently we have be consulted by a number of investors who have suffered losses as a result of investing in non-traded REITs. If you have questions about this or any other matter related to your investment account, please call us at 561 391 1900 , email rhr@dmrslaw.com or visit our website www.dmrslaw.com .   

 

 

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