Non-traded REITS will waive internalization fees

If it catches on, it could be a plus for investors

Jun 9, 2010 @ 10:36 am

By Jeff Benjamin

Two real estate investment trust companies will waive their “internalization fees,” potentially sparking a trend in the REIT marketplace that would bode well for investors.

Grubb & Ellis Equity Advisors, the primary real estate investment and asset management subsidiary for Grubb & Ellis Co., and American Realty Capital Advisors LLC each said they would no longer charge shareholders an internalization fee — a fee that is commonly applied once a non-traded REIT takes over its own management and begins trading on an exchange.

The fee, which is traditionally paid out of shareholder assets to the REIT sponsor firm, is based on a multiple of the REIT’s management and performance fees, and it can be significant.

Between 2000 and 2007, seven non-traded REITs paid internalization fees to sponsor firms that ranged from $68 million to $375 million.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video

INTV

AXA's Christine Nigro: How to handle being the only woman in the room

Women face unique challenges as they move into the C-suite, and they need to remember to always be themselves and let their professional strengths shine, according to Christine Nigro, vice chairman at AXA Advisors.

Video Spotlight

Will It Last As Long As Your Clients Do?

Sponsored by Prudential

Video Spotlight

The Catalyst

Sponsored by Pershing

Latest news & opinion

New military pension rules need financial advisers to step up and serve

Matching defined contribution plan expected to see more money, more need for sound advice.

Brian Block's $4 million bonus was tied to a key metric at ARCP

Prosecution rests case in fraud trial against CFO of American Realty Capital Properties.

Edward Jones is winning the Google search war

Brokerage firm's digital marketing investment helps land it at the top of local and overall search engine results, report finds.

Voya's win in 401(k) fee suit involving Financial Engines bodes well for other record keepers

Fidelity, Aon Hewitt and Xerox HR Solutions are currently defending against similar fiduciary-breach claims.

Collective investment trusts getting more attention from 401(k) advisers

The funds are catching on due largely to lower costs and more product availability, but come with some inherent drawbacks.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print