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What is a “debt investment fee” and how does it apply to a nontraded REIT?

May 11, 2017

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What is a “debt investment fee” and how does it apply to a nontraded REIT?

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Answer: If a nontraded REIT invests in real estate-related debt instruments, it may pay a debt investment fee to the sponsor for arranging the acquisition of the debt investments.  It has a similar impact on shareholder returns to an acquisition fee paid to the sponsor for real estate property investments.

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Gil Armour, CFP
February 3, 2016

I have been using Blue Vault Partners for the past five years.  I have found them to be a valuable, unbiased resource when it comes to evaluating and comparing non-traded REITs.  The reports help me analyze which sponsors are doing a responsible job of managing their offerings.  This allows me to limit my REIT recommendations to only the most competitive products, and then track those REITs throughout their life cycle.