Tr?id=566623520170033&ev=PageView&noscript=1

Nontraded REIT Sales Slump Amid Market Uncertainty

Posted on July 3rd, 2024 at 12:00 PM
Nontraded REIT Sales Slump Amid Market Uncertainty

From the desk of Jim Eccleston at Eccleston Law

InvestmentNews recently covered the sluggish start to nontraded real estate investment trust (REIT) sales in the current year, observing that the slump reflects the challenges facing commercial real estate investors, hinting at potential devaluation in certain REITs, especially net asset value (NAV) products.

Unlike listed REITs, nontraded REITs lack a market-driven valuation mechanism. Instead, they rely on internal appraisals to gauge their real estate assets' worth, a critical factor in determining their overall value.

InvestmentNews shared data from Robert A. Stanger & Co. Inc. The data revealed a significant drop in nontraded REIT sales in the first two months of this year, down to approximately $900 million. This decline, with an annualized rate of $5.4 billion, contrasts sharply with previous years' sales figures.

The deteriorating performance of listed REITs, experiencing declines of over 30 percent, raises concerns about when NAV REITs may follow suit. The impact of rising interest rates and the long-term effects of COVID-19, particularly on office occupancy rates, have exacerbated the challenges facing the commercial real estate market.

Key players like Blackstone Real Estate Income Trust Inc. (BREIT) have witnessed fluctuating net asset values, prompting speculation about potential downward adjustments. Market observers anticipate NAV reductions, with estimates suggesting a potential 30 percent decrease based on prevailing market trends.

According to InvestmentNews, investors are advised to consider divesting their NAV REIT positions before any impending value adjustments. NAV REITs typically offer
limited liquidity programs, making it crucial for financial advisors and their clients to act prudently in light of market uncertainties.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law

Return to Archive

TESTIMONIALS

Previous
Next
Quotes Bigger

As a financial advisor with over 20 years of experience, I feel fortunate to call Jim my attorney and friend. He is a fantastic lawyer and trusted advisor. He is skilled in the matters necessary to do the job well. He uses his thoughtful approach and calm demeanor to achieve a positive outcome for the client. If you want to feel confident that nothing will be missed and that you will be represented in a highly professional manner, call Jim Eccleston.

Bill C. and Dan M.

LATEST NEWS AND ARTICLES

1787765850 Law
August 26, 2026
FINRA Orders WestPark Capital to Pay $520,000 Over GWG L Bond Sales

The fallout from the collapse of GWG Holdings continues to affect the broker-dealers that sold the company's illiquid L bonds.

1787679428 Law
August 25, 2026
Ameriprise Broker Sues LPL-Affiliated Practice Over Use of "Kindred" Name

AdvisorHub reports that an Ameriprise Financial broker in Oklahoma has filed a trademark infringement lawsuit against an LPL Financial-affiliated practice over its use of the word "kindred" in its name.

1787592120 Law
August 24, 2026
Sophisticated Voice Phishing Attacks Target Major Wall Street Firms

According to ThinkAdvisor, hackers recently launched a series of sophisticated cyberattacks against major Wall Street firms, including prominent hedge funds and private equity companies.