Securitized real estate often falls in the category of alternative investments. “Alternative” is a more difficult term to define, and—fairly or unfairly—can have either a positive or negative “alternative lifestyle.” Generally, the securities industry has pinned the label “alternative” on assets not brokered or packaged by Wall Street. Ironically, real estate—the original asset class— eclipses stocks in total market value, yet real connotation, as with “alternative milk,” “alternative music,” or the very loaded
Non-traded programs provide an investor experience that more closely resembles the financial behavior of the underlying assets.
estate is considered an “alternative” investment, both by Wall Street and its regulators.
This guide does not include the entire universe of non-traded alternative investments. Programs described below generally are:
Securitized alternative programs also generally have higher fees and commissions than either traded or directly-owned versions of the same assets. Ideally these costs are justified by management effort, expertise and value, and mitigated by the inherent long-term nature of “alts.” Understanding fee structures and expenses is critical to successful investing. The table on page 7 includes common examples of various fees and expenses that may come with securitized alternative investment programs. Most importantly, all non-traded alternatives below provide returns based on the performance of the actual underlying assets. If we could say the same for Wall Street, we would not need any “alternatives."
Widely syndicated through independent broker-dealers
Subject to multiple layers of due diligence
Pass through to investors the tax treatment of their assets
Most of these investments are available only to investors who meet state concentration/income standards or federal accreditation standards. Generally, they are not subject to “double” taxation.
PAGE 05
Powered by FlippingBook