According to Craig McCann, principal of Securities Litigation & Consulting Group, shareholders are about $50 billion worse off for having put money into non-traded real estate investment trusts rather than exchange-traded versions. McCann said his calculation of a roughly $50 billion “wealth loss” to investors from non-traded REITs is detailed in a paper he co-wrote that will be published in a few months by Investments & Wealth Monitor, a trade journal of the Consultants Association, which offers credentials to brokers and financial planners.
After a review by the Wall Street watchdog revealed problems, The Financial Industry Regulatory Authority cautioned brokerage firms about the way they market non-traded REITs. Investing in a wide range of real estate from apartments to hotels to strip malls, Non-traded REITs tend to have higher fees for investors than publicly-traded REITs and can be tougher to cash in.