REISA and Blue Vault Form Strategic Partnership to Share Historical Full-Cycle Non-Traded REIT Return Information

Feb 21, 2014

Blue Vault Study finds full-cycle events returned roughly
$16 billion to non-traded REIT equity investors in 2013
REISA has announced a strategic partnership with Blue Vault Partners to share results of the company’s 2013 Non-traded REIT Full-Cycle Performance Study, which assessed the performance of non-traded REITs that have provided shareholders with full liquidity. The intent of the partnership is to better educate the financial services industry, media and general public.

The study takes a comprehensive look at the 27 full-cycle events that have measurable results and occurred within the non-traded REIT industry between April 1997 and October 10, 2013, 10 of which went full-cycle between April 1, 2012 and October 30, 2013. Full-cycle events in the non-traded REIT industry occur when a REIT completes a listing of its common stock on a public exchange, is acquired by or merges with another entity, or liquidates its real estate portfolio.

“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.

“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.
“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.”

With eight full-cycle events taking place during 2013, assets under management for the non-traded REIT industry are estimated to be $77 billion as of the end of 2013, down from $84.9 billion at the close of 2012. Early estimates indicate that the non-traded REIT industry raised more than $19 billion in new capital during 2013, the highest amount raised in one calendar year and nearly double the amount raised in 2012. Results also showed that full-cycle events returned an estimated $16 billion to non-traded REIT equity investors during 2013.

Blue Vault Partners collaborated with the Real Estate Finance and Investment Center at University of Texas at Austin McCombs School of Business to prepare the study.