Profile In Courage

Here's an article from InvestmentNews on Behringer Harvard.  This sentence stood out to me:

Meanwhile, other broker-dealers — including FSC Securities Corp., Royal Alliance Associates Inc. and SagePoint Financial Inc., which constitute the American International Group Inc.'s Advisor Group — stopped selling the Multifamily REIT last summer when its offering period ended, according to spokeswoman Linda Malamut.

Is stopping sales when a deal closes its offering period really stopping sales?  Hasn't the bird flown, or the cows left the barn, or the fat lady sung, or the lights been turned off because the party's over?  The answers, of course, are No and Yes.  AIG didn't stop sales and sold Behringer Harvard through the end of its offering. Period.

Behringer Harvard Multifamily's distribution overpayment was no secret.  Multifamily neatly presented this fact every quarter throughout its long offering period.  This was a better story two years ago when broker / dealers had an actual decision to make.

I think a better question is what are broker / dealers doing now about other non-traded REITs that are two and three years into their offering periods and not making any headway towards covering their distributions.  Like Multifamily, these REITs disclose quarterly their inability to adequately fund their distributions.