REITs are financial products with underlying real-estate assets expected to appreciate, assets that might include, for instance, apartment buildings, developments, mortgages, etc. Non-traded REITs are not freely traded on any exchange. Investors must rely on the issuing company for evaluations, which are difficult if not impossible to independently verify. As a category, the reputation of non-traded REITs turned sour beginning around 2010, after an influx of billions of yield-seeking investments dollars in 2008. Common to many non-traded REITs are complaints of high commissions and management fees, undisclosed risks, and unexpected liquidity problems.
Hines Global REIT, as its name suggests, invests in U.S. properties and also in the U.K., Poland, Russia, and Australia. It was launched in August 2009. As of 2011 it was paying a yield of $6.90 to investors while showing a negative earnings margin, calculated on GAAP, of $2.64 per share. The issuer advises its investors to anticipate a liquidity event some time between 2017 and 2019, although, as usual, its board reserves the right to schedule, reschedule or postpone any liquidity event at its sole discretion.
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