The publicly traded REIT industry hates the non-traded REIT industry. Why? I suppose because the expenses are higher in the non-traded REIT world and because customers are not as apt to get out during market downturns. Mainly because they cannot easily exit, if at all, unless there is a hardship, disability or death. Besides, when there is a stable dividend sent monthly or quarterly, no one much wants to get out.
One does want to be careful about which non-traded REIT he or she uses. If the dividends are high, they may not be supported by the cap rate. Essentially, the first-year rent divided by the purchase price.
You might check out the CB Richard Ellis (CBRE) offering, sold by CNL. CNL has a history of successful REIT offerings. Most of the property in the REIT was acquired during the dog days of 2007 and 2008, when prices were real low, low, low. This provides for a relatively high cap rate versus a reasonable dividend rate of 6%, paid quarterly.
Check it out and let me know what you think, OK? You can reach CNL at (866) 810-9373. Before making the call, please check to see if your broker-dealer has a selling agreement with CNL for the CBRE Realty Trust. CB Richard Ellis is in the process of becoming the largest commercial real estate firm in the world — it will, probably by the end of June, have 35,000 employees in 60 countries.
Have a terrific week and do good work.
