United Realty Trust Incorporated (URTI), a public non-traded REIT which originally offered shares at $10.45 a piece, recently published its initial net asset value (NAV) of $12.51 per share.
The non-traded REIT’s valuation policy is consistent with FINRA Rule 2014-006, which will change the reporting requirements in how broker-dealers list the values of public, non-traded REITs and direct participation programs (DPPs).
“United Realty has long supported this reporting change in favor of increased transparency, which is in the best interest of the investor,” said Jacob Frydman, CEO and Chairman of URTI. “The new rule will allow financial advisors and their clients to more easily identify those REITs that are creating value, as well as those that are not.”
FINRA 14-006 provides two options for reporting estimated per share values on customer statements, net investment and the appraisal method.
Net Investment, in short, would use the amount available for investment after deduction of certain fees, while the appraisal method would require at least material assistance from an outside third party to determine values for each asset and liability on an annual basis.
Be sure to read Changes to Valuation Guidelines for Unlisted REITs and Direct Participation Programs
URTI used the appraisal method with the help of KTR Real Estate Advisors, an established commercial property appraisal firm based in New York City.
“By leading the way on share reporting, United Realty reinforces its commitment to putting the interests of our investors and the financial services community first,” added Frydman. “FINRA Rule 2014-006 will create a more transparent marketplace for non-traded REITs, and URTI is well positioned to spotlight how our focus on value-added and opportunistic investing enhances value for our investors.”