Blue Vault Insights- Page 22 of 23

Blue Vault Insights

April 24, 2017

The Use of Debt in Nontraded REITs

The Use of Debt in Nontraded REITs Virtually all nontraded REITs utilize debt to finance property portfolios. There are many reasons cited by nontraded REIT sponsors to finance investments in commercial real estate with combinations of equity raised through their public offerings and debt obtained in the form of mortgages secured by the REIT’s assets.…

March 27, 2017

Are REITs Like Bonds: Why or Why Not?

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,…

February 21, 2017

Capitalization Rates Recapped in Today’s Market Environment

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.…

January 16, 2017

Interval Funds and Nontraded Closed-End Funds: Defined and Demystified

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.

October 17, 2016

Economies of Scale in Nontraded REIT Offerings and Effects of Fee Discounts

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…

October 4, 2016

Nontraded REIT Share Online Auctions – Update on July 2016 Article

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…

September 21, 2016

Doing Your Due Diligence

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…

August 15, 2016

Interval Funds: A Growing Industry, but What Are They?

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…

July 18, 2016

Nontraded REITs Share Online Auctions

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…