The price structure of non-traded hotel REITs is putting investors that are in it for the long haul at a disadvantage, according to a report from the Cornell University School of Hotel Administration\u2019s Center for Hospitality Research titled \u201cNon-traded REITs: Considerations for Hotel Investors.\u201d The report argues that while REITs can be appealing buy-and-hold investments, thanks largely to their hefty dividend payouts, those payments are lower for long-term investors.\u201cIn effect, the early investors subsidize the commissions paid to the dealers who sell to late-term investors,\u201d states the report, written by John Corgel, Robert C. Baker professor of Real Estate for Cornell\u2019s School of Hotel Administration, and Scott Gibson, professor at the Mason School of Business at the College of William & Mary. \u201cThis effect is an unintended consequence of the fact that the REITs\u2019 share prices are fixed, regardless of the value of the underlying assets. The REITs\u2019 high-dividend structure mitigates the effect, but those dividends mean that some REITs\u2019 payouts exceeded the cash they took in (as measured by funds from operations).\u201dThe structure of non-traded hotel REITs does not indicate that investors should steer clear; rather they should thoroughly examine the performance of such investment vehicles. The report offers recommendations for investing in non-traded hotel REITs, including to study the company and its management\u2019s track record, review tax regulations, read prospectuses, assess dividend-payment policies, have a clear understanding of exit strategies and review the sponsor\u2019s history.<\/p>\n","protected":false},"excerpt":{"rendered":"
The price structure of non-traded hotel REITs is putting investors that are in it for the long haul at a disadvantage, according to a report from the Cornell University School of Hotel Administration\u2019s Center for Hospitality Research titled \u201cNon-traded REITs: Considerations for Hotel Investors.\u201d The report argues that while REITs can be appealing buy-and-hold investments,…<\/p>\n","protected":false},"author":1314,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37301],"tags":[],"class_list":["post-1003920701","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"acf":[],"yoast_head":"\n