Does a direct industrial deal at a 6.4 percent cap justify exiting a non-traded REIT paying 5.8 percent mid-hold
Take a $340k position in a non-traded REIT, 22 months in, paying 5.8 percent on a stated NAV of $10.12. The repurchase window opens in q3 and is capped at 5 percent of NAV, so the holder is competing with everyone else for their own money. Against that sits a direct deal with a hard close date, a 4-unit flex at 18,400 sq ft asking $2.1m, which two partners could cover by pulling the REIT position and adding cash. The REIT distributions have been consistent, roughly $1,625 a month, with no drama. Flex vacancy in that submarket is 4.1 percent and two of the four tenants just renewed above ask. On paper the direct deal wins on yield, and the buyer controls the asset. The part that traps people is the 22 months already spent on the liquidity clock. Walking out at a possible discount to NAV feels like paying twice, and that feeling is sunk cost talking. The honest comparison puts the discount plus any repurchase haircut against the yield spread over the direct deal's hold, and leaves out everything the REIT has already paid. Has anyone here run that math when a deal with a hard close date landed mid-hold?
