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Florida Business, Whistleblower, & Securities Lawyers / Blog / Investments / MORNINGTAR TO OFFER RATINGS ON NON-TRADED REITS


Financial research firm Morningstar, Inc. will begin offering ratings for non-traded real estate investment trust (REITs) as early as the end of the first quarter next year. It is unknown whether Morningstar will apply its well-known star ratings system to the non-listed REITs. Morningstar research is utilized by over 4,000 institutional and advisory clients, along with 7.3 million retail investors. Coverage by Morningstar marks the first time a national financial services firm has performed due-diligence analysis on the $10 billion-a-year industry. Currently, the brokerage firms that sell REITs to clients control the flow of information around the investments.

“It’s more scrutiny, research, evaluation and analysis around the industry, and I think that will ultimately be a very positive thing,” Kevin Hogan, executive director of the IPA, a trade group for non-traded REIT sponsors and the broker-dealers who sell them said in an interview. “I would have thought the [REIT sponsors] would have more anxiety over it, but to a person, every sponsor has said [Morningstar’s coverage] brings non-traded REITs into the mainstream.”

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