Own Worst Enemies

I ranted here about non-traded REITs having too many share classes.  This DI Wire article about Black Creek (formerly Dividend Capital) Diversified Property Fund reads like a parody.  The REIT now has seven share classes: A, D, E, I, T, S, and W.  Seriously, it is freaking ridiculous.   Black Creek / Div Cap, it's time to get real:  This REIT can add twenty-six share classes, but the only time it raises money is when it periodically offers shares bribes broker dealers with a big upfront commission.  Instead of wasting investors' time trying to bring in more money, why not just convert everyone to a single liquidating share class (call it Class L, of course!) and get investors the heck out of this dog.

Black Creek Diversified Property Fund is not the only public non-traded REIT I have seen recently offering a nonsensical number of shares classes.  I have even seen one that is adding numbers after letters, like Class A-1.  Hey sponsors, I am not sure who is advising you to offer so many share classes, but the advice is bad.  Yes, Blackstone's REIT has multiple share classes and is raising hundreds of millions, but it is the exception not the rule.  Do not mimic Blackstone until you get wire house selling agreements.  Until then, you are only confusing your product and getting no sales.