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ARTICLE · 15 FEBRUARY 2023

A Better Liquidity Feature For Non-Traded REITs: Share Repurchase Plans And The Next Frontier

Goodwin Procter LLP
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In recent periods, a number of prominent non-traded real estate investment trusts (REITs) disclosed that repurchase requests from stockholders under their share repurchase plans exceeded monthly or quarterly repurchase limits and that, as a result, all repurchase requests were not satisfied.

United StatesFinance and Banking
David Roberts
David Roberts
Ettore Santucci P.C.
Ettore Santucci P.C.
Yoel Kranz
Yoel Kranz
Mark Schonberger
Mark Schonberger

In recent periods, a number of prominent non-traded real estate investment trusts (REITs)1 disclosed that repurchase requests from stockholders under their share repurchase plans exceeded monthly or quarterly repurchase limits and that, as a result, all repurchase requests were not satisfied.2 This alert looks at the different types of current non-traded REIT share repurchase plans and at some potential improvements in the liquidity feature that may be adopted by non-traded REITs in the future.

Share Repurchase Plans Overview

Non-traded REITs at their core wrap an illiquid real estate portfolio into an illiquid securitized container, with no market-clearing mechanism to adjust supply and demand. Share repurchase plans are offered by many non-traded REITs to provide investors with a measure of liquidity from time to time. Under these plans, stockholders can periodically request that the non-traded REIT repurchases all or a portion of their shares. For those

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