Inside the Vault- Page 71 of 94

Inside the Vault

May 1, 2017

What is “LIBOR” and how does it relate to the cost of debt for nontraded REITs?

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.…

April 27, 2017

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?

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

April 25, 2017

One nontraded BDC produced a total return of an astounding 28% in 2016, find out who.

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

April 24, 2017

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?

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.

April 20, 2017

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

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

April 18, 2017

Did you know that Blue Vault releases individual nontraded REIT pages (performance pages) as they are completed by Blue Vault. We do not wait

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…

April 17, 2017

Which basis for calculating Asset Management Fees results in higher costs to the nontraded REIT for the percentage rate: Cost of investments less debt or aggregate market value?

Which basis for calculating Asset Management Fees results in higher costs to the nontraded REIT for the percentage rate: Cost of investments less debt or aggregate market value? Answer: Aggregate market value

April 13, 2017

Which has more impact on the average rate of return for a stockholder in a nontraded REIT, assuming an eight-year holding period, an elimination of acquisition fees of 1.00% or a reduction of asset management fees of 0.20%?

Which has more impact on the average rate of return for a stockholder in a nontraded REIT, assuming an eight-year holding period, an elimination of acquisition fees of 1.00% or a reduction of asset management fees of 0.20%? Answer: The reduction in asset management fees has more impact, increasing average shareholder returns by roughly 0.20%…

April 11, 2017

What investment beat the S&P 500 in total return for the year of 2016?

What investment beat the S&P 500 in total return for the year of 2016? Answer: Nontraded BDCs, which posted an average 12.95% return vs. the 12.44% return of the S&P 500 (if dividends were reinvested).