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Jun 2, 2009 6:33 pm
hey all...looking at non-traded reits...kbs and cole look decent but the loads are out of sight...anyone selling these?  any advice?
Jun 2, 2009 7:07 pm

KBS is a good firm with a good dividend.  If the client reinvests the dividend and hated the investment, they would be whole in approximately 18 months after the deferred sales charge, how is that out of sight?  My clients have been happy with the steady dividends and no decrease in value on their statement.

Lapide

Jun 2, 2009 7:16 pm

I agree w/Lapide about the sales charge being no big deal.  WP Carey is a company we use a lot.  Good diversity, pretty conservative and their dividends almost always increase.  Stay away from Inland.

Jun 2, 2009 7:21 pm
3rdyrp2:

I agree w/Lapide about the sales charge being no big deal. WP Carey is a company we use a lot. Good diversity, pretty conservative and their dividends almost always increase. Stay away from Inland.





Consider you Inland doesn't have an offering that wouldn't be too hard.

Jun 2, 2009 7:23 pm

The main idea behind each reit is different..

Cole-constant dividend, no real bump up in the end

Inland- main focus is when selling the reit or taking it public(40% gains aren't out of the question in final year)



KBS- combo between the two... except they do a lot with purchasing liens on properties at discounts...



I have used all three and as long as you don't over sell(like anything) these are great investments in a portfolio.

Jun 2, 2009 7:53 pm
chief123:
3rdyrp2:

I agree w/Lapide about the sales charge being no big deal.  WP Carey is a company we use a lot.  Good diversity, pretty conservative and their dividends almost always increase.  Stay away from Inland.



Consider you Inland doesn't have an offering that wouldn't be too hard.

 
I don't think they had much of a choice but to close their most recent one.  They're overleveraged enough as it is, they need to lay off the sauce for a couple seasons.
Jun 2, 2009 8:35 pm

The latest one was fine.. It was the one before Inland western that has trouble(but that's what happens when you buy during a bullrun in real estate) the only advantage the other companies had was that they started their offering later... sometimes better to be lucky then good...



I have clients in Inland American(the one they recently closed) still paying 5%(not terrible in this market) and picking up great properties and other reits for pennies on the dollar that they would have bought anyways.



They closed it because they had too much cash(didn't want to buy in last year)

Jun 2, 2009 9:07 pm

Good point, the western is the one I was specifically thinking about.

Jun 2, 2009 9:30 pm

Yeah that was a tough beat, though if they hold it long enough they may get something out of it.. The one before that Inland Retail(i think) was huge.. 7% dividends then 40% payout in last year...

THey have done 300 some and in all of those clients have never got less than they put in.. Western might change that...



Jun 2, 2009 10:24 pm

Clients are still in the profit pretty good on Inland Western so I wouldn't worry that it won't finish as a profitable REIT.  Surely not as good as hoped but still pretty good.  Inland Retail before Western was paying 8.3% at time of Sale.  Inland all in all has been the best investment I've ever worked with. 

Right now, I'm using Cole and KBS, but have also used Hines in the past too.  The non traded REITs have been an amazing asset class for along time and sure helped clients portfolio from looking like complete disaster. 

Jun 2, 2009 11:23 pm

But a good way to get burned with non traded REITs is over subscribing to one company..