Investment News reports on a study that finds that the non-tradeable REITs that Ray Lucia is so fond of have consistently underperformed the broad market of real estate investing for the past two decades.
Interestingly, the study notes that the industry is seeing more and more independent broker-dealers like the Lucias out there, raising money for these stinkers.
The reason why these non-tradeable REITs are such dogs will be familiar to readers of this blog: the high fees.
The fees on nontraded REITs, which can be as high as 12% to 15%, are particularly egregious, one industry executive said. “An investor gives $100,000 to a program, and he’s immediately at $85,000,” said Wes Tellie, director of operational risk due diligence and independent broker-dealer due diligence with Duff & Phelps Corp. “That’s a hell of a hurdle rate.”
The nontraded REIT industry had some $84 billion in assets under management at the end of 2011.
Remember, that just because everyone else is doing it doesn’t make it a reasonable investment. Valuations of non-tradeable REITs, the article concludes, are “at a point of comedy.”
I’m going to make some popcorn, sit back and enjoy watching the silver-tongued “guru” explain his way out of this one.
In my last post on Cunningham briber Brent Wilkes, I noted that he has been playing poker and farting around while his team of court-appointed attorneys fights to keep him from serving a 12-year sentence for plying Duke with hookers, lavish trips to Hawaii in exchange for defense contracts.
In court papers filed ahead of a hearing granted by the 9th Circuit Court of Appeals, prosecutors say Wilkes has been doing more than that: Wilkes has been committing crimes by stealing more than $100,000 from the pension fund of his now defunct company to pay his living expenses.
Since Wilkes’s release from custody on January 5, 2009, Wilkes has engaged in additional fraudulent conduct: just as he once raided his children’s college funds to obtain operating cash, he has unabashedly raided the Wilkes’s Corporation’s employee benefit plan to obtain spending money for himself – while failing to reimburse the public for his taxpayer-funded attorneys.
Update: After a day-long hearing, Judge Larry Burns decided that Wilkes has to go to jail on Friday unless the 9th Circuit Court of Appeals saves his ass again. (U-T San Diego)
March 3, 2009 Consulate Monterrey
S E C R E T
SUBJECT: MEXICO: TRACKING NARCO-GRENADES CLASSIFIED
1. (SBU) During recent months Mexican narco-traffickers have directed a series of grenade attacks directed against, inter alia, Mexican law enforcement and military facilities, civilian crowds, and U.S. consular installations. The escalation in the strength and power of the weapons used by the narco-traffickers has not only cost lives, but has taken its toll in terms of the damage done to local civil society.
2. (S) AmConsulate General Monterrey’s ATF Office, the ATF Explosives Technology Branch, and AmEmbassy Mexico DAO have been working with Mexican law enforcement authorities to identify the origin of various grenades and other explosive devices recovered locally over the past few months, including the unexploded M26A2 fragmentation grenade hurled at the Consulate itself during the October 11, 2008 attack. Other ordnance recovered includes 21 grenades recovered by Mexican law enforcement on October 16, 2008 after a raid at a narco-warehouse in Guadalupe (a working class suburb of Monterrey), and twenty-five 40mm explosive projectiles, a U.S. M203 40mm grenade launcher, and three South Korean K400 fragmentation grenades recovered the same day in an abandoned armored vehicle that suspected narco-traffickers used to escape apprehension.
3. (S/NF) Local Mexican law enforcement has recovered a Grenade spoon and pull ring from an exploded hand grenade used in a January 6, 2009 attack on Televisa Monterrey, a Monterrey television station. Based upon ATF examination, it appears that the grenade used in the attack on the Consulate has the same lot number, and is of similar design and style, as the three of the grenades found at the narco-warehouse in Guadalupe. On January 7, 2009, the Mexican Army recovered 14 M-67 fragmentation grenades and 1 K400 fragmentation grenade in Durango City, Durango. Finally and perhaps most disturbing, on January 31, 2009 three men tossed a K-75 grenade into a night club near Pharr, Texas — an East Texas border town –but the grenade did not explode. The attackers may have been targeting three off-duty police officers who were in the club at the time.
4. (S) The lot numbers of some of the grenades recovered, including the grenade used in the attack on Televisa, indicate that previously ordnance with these same lot numbers may have been sold by the USG to the El Salvadoran military in the early 1990s via the Foreign Military Sales program. We would like to thank AmEmbassy San Salvador for its ongoing efforts to query the Government of El Salvador as whether any of its stocks of grenades and other munitions have been diverted or are otherwise unaccounted for.
I’ve recently been contacted by a few disgruntled Ray Lucia investors who found their way to my website and asked for my help. Short of recommending they file complaints the U.S. Securities and Exchange Commission and FINRA, there was little I could do.
However, since I’m one of the few people writing about Lucia, I’ve become a sort of clearing house for these people. One investor who recently contacted me on behalf of her 75-year-old father wants to organize a meeting and speak to others in the same situation. This person was able to get dad out of one of the non-tradeable REITs that Ray Lucia (senior, not junior) stuck him in and is willing to share with others how to do it themselves.
So, if you’re interested, let me know and I’ll pass along the details.
Defense contractor Brent “the Enigma” Wilkes was convicted in 2007 and sentenced to 12 years in prison for bribing former Rep. Randy “Duke” Cunningham with hookers, lavish vacations and the like, but his court-appointed lawyers have done a phenomenal job of keeping the guy out of prison so he can play poker and fart around.
He’s due for a hearing in a few days and the government calls his bluff in this footnote to a motion:
The government tips its hat to defense counsel who have adopted clever stratagems designed to prolong Wilkes’ day of reckoning almost five years since his 2007 conviction. Nevertheless, this latest attempt to prolong and confuse what should be a rather simple conclusion to this lengthy end-game should not be countenanced by this Court. Enough is enough.