REITbid Brings Liquidity to Illiquid Investments
- Sep 04, 2013
REITbid announced a new online auction platform that matches buyers and sellers of shares in existing non-traded public real estate investment trusts (REITs). This new program is powered by an advanced and proven online auction technology (FRE.com) that is secure, user-friendly, transparent and designed to create liquidity in what are typically considered illiquid assets.
Non-traded REITs have issued nearly $80 billion of equity during the past 10 years to more than 2 million shareholders, a number that is projected to rise over the next few years. As the volume of investors increases, so does the demand for shareholders who need to liquidate their shares. With approximately 2/3 of today’s top closed non-traded REITs unable to meet the liquidity demands of their shareholders, those seeking liquidity often turn to low-ball mini-tender offers from predatory investment firms. The Securities and Exchange Commission warns “mini-tender offers have been increasingly used to catch investors off guard” when it comes to determining the value of their shares.
The REITbid platform was founded by a team of senior real estate executives led by William Lange and financed by Ray Wirta. Lange has more than 35 years experience in real estate auction marketing and is chairman of the LFC Group of Companies, a pioneer in online auction solutions. Wirta has more than 40 years experience in commercial real estate and is the former chief executive officer and a current director of CB Richard Ellis (NYSE:CBG). The team made the decision to create REITbid based on industry-wide demand for a viable solution for achieving fairly priced liquidity in non-traded REIT shares.
“Shares of existing non-traded REITs may provide attractive investment opportunities that focus on current dividend yield and appreciation potential,” said William Lange, REITbid principal. “However, a drawback to investing in non-traded REITs has been a lack of liquidity. REITbid not only helps to resolve this issue with an easy-to-use online auction process, it helps existing shareholders achieve fair market pricing based on the anticipated high volume of buyers and sellers who will participate in the auctions.”
In addition to offering a liquidity option and streamlining the entire process of buying, selling and transferring shares, REITbid provides several other unique advantages including:
· User-friendly platform that is easy enough for virtually any qualified investor to use
· Transparency – provides instant access to non-traded REIT metrics and links to SEC filings and sponsor data; users can also view all pending bid activity on each auction
· Convenience – ability to bid on and find documentation about available non-traded REITs 24 hours per day
· Security – strict multi-layer protection of all documents and personal data
“REITbid is engineered to become the industry’s most advanced and comprehensive solution for trading shares of existing non-traded public REITs,” Lange added. “It provides transparency for buyers and sellers, giving them an efficient method for valuing shares based on a REIT’s net asset value (NAV) and other key metrics.”
REITbid is owned by Share Trading Associates, L.L.C. of Newport Beach, Calif. Share Trading Associates is comprised of a team of real estate and auction professionals with extensive real estate investment experience. REITbid auctions are operated under a license agreement by JRL Capital Corporation, a FINRA-registered Broker-Dealer since 1981.