Nontraded REITs Share Online Auctions

July 18, 2016

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 usually tied to distribution reinvestment programs (DRIP) and in numerous cases the redemption or repurchase of shares has been suspended indefinitely by the boards of directors. Blue Vault reports on the redemptions of nontraded REIT shares by each REIT on a quarterly basis, but a more complete picture of the redemption issue would require a comparison of redemptions granted to redemptions requested. REITs may place limits on the percentage of outstanding shares that can be redeemed in a given period and many REITs do not redeem all of the shares that stockholders have requested, in which case only a percentage of each request may be repurchased.

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BlueVault saves a lot of time and effort in obtaining good numbers for analysis and provides good insights to compare against my own.

Derek Hayes Analyst, Cambridge Investment Research Blue Vault's Services April 14, 2016