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HOUSTON-Moody National Co. launched its first non-traded real estate investment trust, which is focused on core commercial real estate acquisitions in top-tier markets. Moody National REIT 1 calls for a maximum $1 billion capital raise through the sale of up to 100 million shares of common stock at a price of $10 per share.

The REIT, which became effective April 15, is offering shares through a national network of broker/dealers. The company also established a distribution reinvestment plan offering 10 million shares of common stock to investors for $9.50 per share. The minimum raise is $ 2 million.

According to the company’s Securities and Exchange Commission filing, the REIT’s portfolio will consist of class A commercial properties in major markets, owned exclusively or in joint ventures. The REIT will also target real estate securities and debt-related investments. The anticipated hold for the assets is 4-to-6 years.

Moody National chairman and CEO Brett Moody tells GlobeSt.com while the REIT is open to all types of real estate product, “we anticipate hospitality and debt instruments to be the two main components in the beginning.” Hospitality product, he continues, was always one of the REIT’s targets. These days, when it comes to hotels and similar product, “cash flows are available at very deep discounts,” Moody comments. “Hospitality has become a more distressed asset class during this past year.”

The process for Moody National REIT 1′s formation was launched a little less than a year ago, well before the credit markets froze. Moody says the timing of the REIT’s introduction is fortuitous, especially given the current climate and opportunities for investment. “We’re seeing unprecedented real estate pricing at this time,” he comments. “It’s a great time to be investing in real estate.”

Though the local company has spearheaded 42 Regulation D offerings through its broker/dealer distribution channel, Moody National decided to introduce a REIT to the market for several reasons. For one thing, credited investors who can buy into a Reg D offering are those with a net worth of $1 million or above. The REIT offering, however, targets investors with a lower net worth, who are willing to make a minimum investment of $2,500.

Moody says relationships his company has with the broker/dealer distribution channel also supported a REIT platform. The network had encouraged him to bring out product lines in addition to the Reg D offerings.”We always liked the publically registered, non-trading platform,” Moody adds. “After receiving encouragement from the broker/dealers, we decided to pursue this route for investment.”

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