Tony V. Leo
Tony Thompson, grand poobah at NNN Realty Advisors, has been in the syndication business since the 1980s. Leo Wells, grand poobah at Wells Real Estate, has been in the syndication business since the 1980s. Both men's firms have raised billions of dollars through the broker/dealer channel. Both men are in their 60s and are seeking liquidity events for some of their holdings.

NNN Advisors, a private company, recently merged with Grubb & Ellis, a publicly traded real estate brokerage firm. This will provide a liquidity event for Thompson, the amount of which I do not know, but I suspect it is significant. The merger has been met with skepticism, at least from myself, as there is an impression, at least from myself, that there is more to the merger than building a bigger real estate company.

Leo Wells' first REIT, Wells Real Estate Investment Trust, has filed to go public and the broker/dealer community's response has been one of relief. Finally a Wells syndication is being listed on an exchange, offering investors a chance to sell their shares.

A closer look reveals that Leo should be viewed with the same jaundiced eye as Tony. Reading Wells' new timber REIT's prospectus shows that Leo is 100% owner of all shares of all Wells companies (except of course the syndications where managers and directors receive shares and individual investors own most of the shares). Leo has never shared any ownership with any of his executives, and he has executives that have been with him for years and who have worked hard. Tony has given ownership to various employees over the years. NNN Advisors' public listing will benefit many of its managers, not just Tony. The liquidation of Wells' funds will only have one beneficiary - Leo. The Wells REIT, as part of its listing, will purchase its external advisor, which is 100% owned by Leo, for $175 million.

For years Leo said the "market was not right to sell." I am not sure that now in a time of private equity, rising interest rates, falling REIT prices and REITs going from public to private ownership is the time to list a REIT. But Leo is now in his mid-60s so I think it is more of his timing rather than the real estate market's timing. Look for more Wells "liquidity events" as Leo converts his real estate empire into cash for estate planning purposes.