Colony Northstar Executive Sees PNLR Changes Attracting Investors

Frank Saracino, CFO for retail companies at Colony NorthStar, Inc. (AMEX: CLNS), joined REIT.com for a video interview at REITWise 2017: NAREIT’s Law, Accounting & Finance Conference in La Quinta, California.

Saracino participated in a REITWise panel that discussed changes in the public non-listed REIT (PNLR) market. He noted that private equity firm Blackstone’s entry into the PNLR segment has turned the focus in the market toward advisory asset management fees.

Saracino noted that the past year has been marked by fee compression, both in terms of what broker-dealers are getting paid and what sponsors are able to earn. Originally, fees as high as 2 percent of total assets were common. Now, fees are down to 1 percent of average assets, according to Saracino.

Transparency has also improved, Saracino said, with funds now giving quarterly, monthly or daily data on net asset values (NAV).

Saracino noted that the range of changes in the PNLR segment “will help drive investors back to the space and force the sponsors to step up and continue to deliver.  For us, that’s a good place to be.”