The Perils of Non-Traded REITs

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The Perils of Non-Traded REITs

Unlisted, or non-traded, REITS differ from listed REITs in that they are not traded on an open market. Rather, non-traded REITs are sold to investors who then hold the product until the end of an investment term.

The value of a non-traded REIT is set by the very companies which sells it.  Unlike a listed, or public, REIT  which is valued daily based on the market in which it is traded, a non-traded REIT’s value is determined by the staff of the REIT, or sometimes by a third party consultant paid for by the REIT.

Non-traded REITs also force investors to sell their shares through the REIT’s own procedure. The usual procedure is to sell shares through a redemption program, however, many such programs have been suspended due to adverse financial conditions when many investors attempt to redeem their shares at once.  The consequence to investors is that they are stuck in the investment until the redemption program is reinstated.

If you or someone you know lost money in the REIT investment, please contact the attorneys at The Frankowski Firm at 888-741-7503 to discuss your potential legal remedies.

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