As some real estate investment trusts try and go public and regulators push for more disclosures from REITs, some non-traded REITs are proving to have far lower values than anticipated, the Wall Street Journal reported. For instance, Retail Properties of America, a very large retail REIT based in Oak Brook, Ill., saw shares valued at $3.20 at it’s initial public offering last month, the Journal said. A year prior the firm was valued at about $6.95 a share. A number of other REITs are in the same boat, the Journal said.
Much of this overvaluation is related to REITs previously not disclosing enough information for accurate valuations to be made. “A year ago none of them really provided the level of disclosure you’re seeing today,” Michael McTiernan, a lawyer at the Securities and Exchange Commission, told the Journal. [WSJ]