Investors of non-traded real estate investment trusts (REITs) have taken a financial beating over the past year, and now another non-traded REIT – Cornerstone Core Properties REIT – joins a growing list of REITs to face an unexpected decline in value.
As reported March 28 by Investment News, the Cornerstone REIT has fallen in value by more than 70%. Investors in the non-traded REIT were informed earlier this month via a letter from the REIT’s chairman that shares of Cornerstone, once priced at $8, are now worth $2.25.
“The estimated per-share value has been adversely affected by the recent global economic downturn, negatively impacting our small business tenant base, which has resulted in approximately $43 million of previously announced impairment charges recorded in the second and third quarters of 2011,” according to the letter.
The Cornerstone REIT isn’t the only non-traded REITs facing issues. Investors in Behringer Harvard Short-Term Opportunity Fund I LP saw their investment’s value fall to 40 cents a share in December 2011, down from $6.48 a share just one year earlier.
The Behringer Harvard Opportunity REIT I also has experienced major declines in its valuation. As of December 2011, the REIT was valued at $4.12 a share, compared to $7.66 a year ago.