Secondary purchases of commingled real estate funds is expected to total $50 million to $100 million in 1997, said Brent Donaldson, president of Liquidity Financial Advisors Inc., Emeryville, Calif.
Liquidity Financial operates SMART, Secondary Market Acquisition of Real Estate Trusts, which trades commingled real estate funds. The firm executed trades of 10 different commingled funds - representing $50 million in volume - for institutional clients in 1996, said Mr. Donaldson. These included pension fund group trusts, private real estate investment trusts, group trusts and limited partnerships.
The expected increase in secondary market trades of commingled funds will be driven by greater interest from investors and realistic pricing expectations from sellers, said Mr. Donaldson.
Volume also will be driven by LFA's expanded capital relationships with public REIT, opportunity funds and pension fund plan sponsors, said Mr. Donaldson.
In addition to commingled real estate funds, trading activity, LFA completed hold/sell and valuation analysis on 15 commingled real estate funds and thinly traded public REITs in 1996. The firm also advised the Apollo Real Estate Fund on more than 20 tender offers on limited partnerships.
LFA maintains research reports on 40 commingled funds. They are available through the Bloomberg system or directly from the firm.