Real Estate Lawyer Sees Continuing Capital Flows into Public Non-Listed REITs

Peter Fass, partner at Proskauer Rose, LLP, joined REIT.com for a video interview during REITWise 2015: NAREIT’s Law, Accounting and Finance Conference held in Phoenix.

Fass observed that new customer account rules from the Financial Industry Regulatory Association (FINRA) aiming to increase transparency of public non-listed REITs (PNLR) have led to speculation about their impact on a number of fronts.

“There’s a lot of talk about how it’s going to affect sales. Who’s going to make the changes? Will it reduce fees to broker-dealers? We shall see,” he said.

Meanwhile, Fass said this year should see another significant amount of money entering the PNLR market.

“There has been a flood of money being recycled,” he said. Fass speculated that the 2015 amount may top the $13 billion invested in the sector last year. He added that normally about half of that amount gets siphoned back into the market.

“It’s a chance for sponsors who have not broken into the top tier to capture some of that equity, and hopefully that will make the industry more competitive,” Fass noted.

Fass was also asked whether he expects the Department of Labor’s fiduciary rule to come into effect.

“That’s the 800 pound gorilla in the room,” he said. “I expect there will be a significant amount of lobbying.”