A Yield to Caution

Article Excerpt

RETAILMOGUL APARTMENT GROWTH REIT is a private REIT (more on those below) with around $236 million in assets. The company pays quarterly distributions that yield a high 4.5%. The REIT has a 1.25% management fee. RealtyMogul invests in apartment buildings; it currently owns eight properties in five U.S. states. To boost investor returns, the REIT aims to add value to its properties through property exterior and unit improvements. RealtyMogul is an example of a private REIT, which is unlike conventional REITs, which are publicly traded. Private REITs calculate the value on their units just twice a year or sometimes quarterly. They also needn’t reveal all the information that’s available to investors in publicly traded investments. Private REITs tout that lack of transparency as a benefit—since it avoids the volatility and speculation of public markets. On the other hand, staying private also cuts the likelihood that nosy outsiders and analysts will find out about and draw attention to hidden risks and problems that the REIT happens to…