Newport Beach, Ca., November 22, 2016. Black Swan Advisors (BSA), long known for its in-depth review of the financial condition of the home building industry, has recently completed a similar study of the Non Traded Reit Industry (NTRs).
The NTR Study (Study) was undertaken to review existing and future financial conditions in NTRs. The Study was completed using the SEC reported financial statements and other materials for each of 45 selected NTRs, mostly the small and medium sized ($500M to $1.5 B in assets). The subject data was aggregated for all companies, then was broken down into 3 segments by size of assets. Operating Statements, Balance Sheets, and Cash Flow statements were used to evaluate each company against the aggregated figures.
BSA initiated a proprietary algorithm to evaluate each of the companies and industry segments. The algorithm uses 18 financial metrics, weighted for their importance, to determine a company by company rating. These rankings are not done in accordance with any financial industry standards but are based on the financial importance ascribed to each by BSA based on its 40 year experience in the real estate industry. Some of the 18 financial metrics used include;
- Dividends paid coverage ratio
- Various leverage ratios
- Property level operating income, including return on cost
- Property level capitalization rates
- Share ownership by insiders
- Various per share valuations, including book value (net worth based),
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