InvenTrust Properties
| Company type | Real estate investment trust |
|---|---|
| Industry | Commercial Real Estate |
| Founded | 2004 |
| Headquarters | Oak Brook, Illinois |
| Website | http://www.inlandamerican.com |
Inland American Real Estate Trust, Inc. (Inland American) is the largest non-traded real estate investment trust (REIT)[1] in the United States with over $9 billion raised.[2] The firm is one of several REITs that have been sponsored by affiliates of Oak Brook, Illinois-based Inland Real Estate Group of Companies, Inc.[3] As of March 31, 2014, Inland American had 183,000,[4] predominantly "mom-and-pop investors."[5] Formed in 2004, Inland American owns commercial real estate in the following asset classes: lodging, multi-tenant retail, and student housing.[6]
The firm is a non-traded REIT, which is a company whose shares are not listed on an exchange. The shares are therefore relatively illiquid.[7] Shares were sold through broker-dealers.[8] While original investors bought in at $10/share,[9] Inland American estimated its shares had a value of $4.00.[10][11]
In March 2014, the firm announced that functions performed by its external, related-party managers would now be performed by the REIT itself.[12] The firm has charged its investors over $1.4 billion in fees and expenses to pay for services provided by these external, related-party managers.[13] It has also been observed that Inland American “bought a lot of property at the height of the market."[14]
Liquidity and spin-off
Ten years after Inland American’s formation, original investors still have only limited options for liquidity. To date,[when?] Inland American has not announced any special distributions of proceeds from nearly $2.5 billion in assets already sold,[15] nor does it intend to distribute proceeds from the announced sale of its $1.1 billion select-service hotel portfolio.[16]
In August 2014, Inland American announced that it would spin-off 46 of its upscale hotels into a REIT named Xenia Hotels & Resorts (proposed NYSE ticker: XHR). On February 4, 2015 Xenia began trading on the NYSE under the ticker XHR.[17] In this transaction Inland American shareholders received a proportional number of shares of XHR.[18] The listing event was the first for the Inland Group since the “disastrous Wall Street debut” of its last REIT in 2012.[19]
Notes
- ^ [1],“Huge non-traded REIT getting liquid?,” Investment News, January 30, 2014.
- ^ [2] Inland Real Estate Income Trust, Inc. Form 424B3
- ^ http://inland-investments.com/REITs/Inland
- ^ [3] Inland Real Estate Income Trust, Inc. Form 424B3
- ^ [4] “Inland’s sword of Damocles,” Crain’s Chicago Business, April 2, 2012.
- ^ http://www.inland-investments.com/Funds/InlandAmerican/REITLanding.aspx?id=137
- ^ [5]“Inland’s sword of Damocles,” Crain’s Chicago Business, April 2, 2012.
- ^ [6]“Once-mighty nontraded REIT sponsor Inland Real Estate Investment Corp. plots a comeback,” Investment News, March 2,2014.
- ^ [7],“Huge non-traded REIT getting liquid?,” Investment News, January 30, 2014.
- ^ "Inland American cuts NAV after asset sale". Investment News. Feb 28, 2015.
- ^ [8] Inland American Form 8-K
- ^ [9]"Inland American Real Estate Trust, Inc. Reaches Important Milestone – Signs Agreements to Become Self-Managed,"Inland American Press Release, March 13, 2014.
- ^ [10] Inland American Forms 10-K and 2014 Q2 10-Q
- ^ [11]“What’s in store for Inland REIT shareholders?,” Investment News, March 24, 2014.
- ^ [12] Inland American Form 10-K
- ^ [13]"Inland American Announces Sale of Select Service Hotel Portfolio for $1.1 Billion," Inland American Press Release, September 18,2014.
- ^ "Inland American Completes Spin-off of Xenia Hotels and Resorts, Inc."
- ^ [14]"Inland American Announces Intent to Spin off Its Lodging Subsidiary," Inland American Press Release, August 11, 2014.
- ^ [15]“Stepping up the money chase.” Crain’s Chicago Business. October 17, 2013.