logo
  Join        Login             Stock Quote

Non-Traded Reits Suffer Further Devaluations.

 December 31, 2012 10:10 AM


Several large non-traded REITs recently announced further devaluations.  For example, Inland American REIT recently announced that its valuation was decreasing to $6.93 per share (down from its latest valuation of $7.22 per share, and even lower from its original value of $10 per share).

Behringer Harvard REIT I also announced a drop in estimated value to $4.01 per share from $4.64 per share and Hines REIT announced its share value had dropped to $7.61 from $7.78 per share.

Although one large non-traded REIT, KBS REIT, announced its shares had risen nominally from $5.16 per share to $5.18 per share, overall the news for non-traded REIT investors represented more disappointment in these underperforming investments.

[Related -The Boeing Company (BA) Q2 Earnings Preview: Durable Earnings Beater]

Further compounding the problem with these devaluations is the shares are illiquid and it is unlikely that the secondary market is paying anywhere near the announced estimated values.  Due to the illiquid nature of non-traded REITs, the buy side of the secondary market is usually inhabited by enterprising and sophisticated venture capital firms and hedge funds.  These entities know that the sellers of non-traded REITs are often desperate for liquidity so the offers  are often for significantly less than the book value of the underlying assets.  With any real estate investment, though, the "true value" is whatever someone is willing to pay so it is likely that secondary market value of these non-traded REITs is currently less than the recently announced "estimated value."

iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageLadenburg Thalmann Financial Services (NYSEMKT:LTS): Heavy, Durable Insider Buying

Ahh, but any worries over price levels didn’t stop multiple insiders at Ladenburg Thalmann Financial read on...

article imageInternational Business Machines Corp. (IBM) Q2 Earnings Preview: Small Beat and Pop

International Business Machines Corp. (NYSE:IBM) will host a conference call Wednesday, Jul. 16, 2014 at read on...

article imageGoogle Inc. (GOOGL) Q2 Earnings Preview: A Few Pennies Either Way Make a Big Difference.

Google Inc. (NASDAQ:GOOGL) will hold its quarterly conference call to discuss second quarter 2014 financial read on...

article image19 Companies That Could Beat Earnings and Pop on Price Next Week

Using iStock’s proprietary iEstimates model, we have identified 19 publicly traded companies that could read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center

Related Articles:

How To Profit From The Death Of The Big Banks
More Articles on: ETFs



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.