New Entrants in Field of Nontraded REITs
October 31, 2016 | By Karina Estrella | Urban Land
This article is republished with permission from REITCafe.
According to The DI Wire, Cantor Fitzgerald is launching a $1 billion nontraded real estate investment trust (REIT) called Rodin Global Property Trust Inc. Rodin intends to focus investments to single-tenant, net-leased commercial properties located in the United States, the United Kingdom, and other European countries. The firm is offering three classes of common stock: class A, class T, and class I shares. The Blackstone Group also launched its first nontraded REIT, Blackstone Real Estate Income Trust, back in August. The Wall Street Journal reports that Blackstone is working to improve the traditional model and will roll out four classes of shares, each with a different fee structure. Both REITs have a minimum permitted investment requirement of $2,500.
Rodin Global Property Trust and Blackstone Real Estate Income Trust are entering the nonlisted REIT sector while it is experiencing substantial headwinds, facing criticism for high fees, vague disclosures, and low returns. The flow of capital to the sector has been scarce for the past several years. A fraud scandal involving Nicholas Schorsch of American Realty Capital in 2014 heightened public distrust in nontraded REITs, and thus the inflow of capital has diminished since then.
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.