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How did the average returns to nontraded REIT shareholders who tendered their shares prior to the full-cycle events for those NTRs compare to the average returns to shareholders who held their shares until the full-cycle events?

April 7, 2020

How did the average returns to nontraded REIT shareholders who tendered their shares prior to the full-cycle events for those NTRs compare to the average returns to shareholders who held their shares until the full-cycle events?

Answer: For a sample of 39 REITs with third-party tender offers, those shareholders who invested in the first quarter of an NTR offering and held their shares until the full-cycle liquidity event had an average annualized total return of 3.21% compared to a negative average return of 3.32% to shareholders who tendered their shares, a difference in the annualized total return averaging a negative 6.52%.  Tender offer prices in the sample averaged 32.7% less than the full-cycle price.  This indicates that tender offers are more likely to be made for REITs that are underperforming, and at a significant discount to the eventual full-cycle values.

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Loreen M. Gilbert, CIMA, AIF, CRC, CLTC – President, WealthWise Financial Services
Blue Vault
July 6, 2016

Our firm has been using Blue Vault from the first year it was available.

We have found it to be a valuable tool to verify what wholesalers tell us and to dig deep into how the reported investments are really performing.

We appreciate that Blue Vault has expanded its services from initially covering REIT's to now also including BDC's.

Our clients also appreciate that we conduct this additional due diligence on their behalf.