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Bloomberg: New York Condo Deals Sought for Online Investors by New REIT

From Bloomberg:

A new real estate investment trust opened shop this week, seeking to raise $50 million from investors online. It plans to use the money on some of the most sought after properties in the world: New York apartments.

NY Residential REIT is a “blind pool,” meaning it owns no assets and is courting investors on the strength of its management team to purchase properties once it has funds. It’s springing to life partly from Manhattan’s growing supply of costly apartments, and partly from a Securities and Exchange Commission rule making it easier for small companies to access capital.

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“That structure is very tough in the U.S. REIT space, because most U.S. REITs are internally managed,” said Dirk Aulabaugh, managing director at Green Street Advisors LLC, who consults for public and private real estate firms and isn’t involved in NY Residential REIT. “A lot of time fees are based on assets under management so, as you can imagine, you get more fees the more assets you manage. One issue is: do you just grow for the sake of growing?”

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To read the full article from Bloomberg, click here.