The Real Estate and Investment Securities Association (REISA), a national trade association serving the alternative investment industry, and Blue Vault Partners have teamed up to offer the 2013 Non-Traded REIT Full-Cycle Performance Study (the study), to members of the trade group at a discounted rate. REISA announced the strategic partnership today stating the intent “is to better educate the financial services industry, media and general public.”
The study, which was conducted by Blue Vault, evaluated returns of non-traded REITs that provided full liquidity to shareholders. According to the announcement, there were 27 full-cycle events with measurable results from April 1997 through October 10, 2013 that were analyzed; 10 of these happened after April 1, 2012.
“Through our partnership with Blue Vault Partners we can offer our members discounts on this valuable research study, which provides the alternative investment community unique insight into the non-traded REIT industry at a time when it needs it the most,” said John Harrison, chief executive officer and executive director of REISA in the statement.
In 2013, eight non-traded REITs experienced a liquidity event, which could have included the listing of its common stock on a public exchange, a merger, or selling off its assets. According to the study, these events returned about $16 billion to investors during the year.
A sneak peak at the results.
“Possibly one of the most interesting findings from our study was that two-thirds of the full-cycle REITs outperformed the S&P 500 Index and 20 of 27 outperformed Intermediate-Term U.S. Treasury Bonds when compared over matched holding periods,” said Vee Kimbrell, managing partner of Blue Vault.
How does this compare on an annual basis?
Mr. Kimbrell continued, “Our study showed that full-cycle non-traded REITs averaged annual returns of 8.27 percent, outperforming both the S&P 500 Stock Index total return of 6.08 percent, and the Intermediate-Term Treasury Fund benchmark’s average returns of 6.22 percent over matched holding periods. These findings suggest a potential for diversification benefits within a context of well-diversified portfolios.”
The Real Estate Finance and Investment Center at University of Texas at Austin McCombs School of Business assisted Blue Vault with this study.
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