NEWPORT BEACH, CA—REITbid has launched a new online auction platform that matches buyers and sellers of shares in existing non-traded public real estate investment trusts (REITs). This new program is powered by an advanced and proven online auction technology (FRE.com) that is secure, easy to use, transparent and designed to create liquidity in what are typically considered illiquid assets, the company says.
Non-traded REITs have issued nearly $80 billion of equity during the past ten years to more than 2 million shareholders, a number that is projected to rise over the next few years. As the volume of investors increases, so does the demand for shareholders who need to liquidate their shares. With approximately 2/3 of today’s top closed non-traded REITs unable to meet the liquidity demands of their shareholders, those seeking liquidity often turn to low-ball mini-tender offers from predatory investment firms. The Securities and Exchange Commission warns “mini-tender offers have been increasingly used to catch investors off guard” when it comes to determining the value of their shares.
The REITbid platform was founded by a team of senior real estate executives led by William Lange and financed by Ray Wirta. Lange has more than 35 years experience in real estate auction marketing and is chairman of the LFC Group of Companies, a pioneer in online auction solutions. Wirta has more than 40 years experience in commercial real estate and is the former chief executive officer and a current director of CB Richard Ellis (NYSE:CBG). The team made the decision to create REITbid based on industry-wide demand for a viable solution for achieving fairly priced liquidity in non-traded REIT shares.