Investment Q&A

Poor liquidity and access to financial data are the main concerns on private deals. We have seen some disasters in the private space, and do not see the extra 1.5% or 2% yield offered typically as 'worth it', considering the additional risks. Essentially, an investor is betting entirely on the manager's ability to set up a proper portfolio and manage credit, occupancy and other risks. While this is also true of a public REIT, with a public REIT there are other investors and analysts who provide market info (through buying/selling and analyst reports). Thus, when a problem occurs with a public REIT it is usually 'telegraphed' through a declining price. With a private REIT, when there is a problem it usually hits all at once (and can result in suspension of redemptions, which often occurs). Not all privates are bad, and some are quite good. But we just do not feel the additional yield is worth it.