DTCC AIP Service Processes First Non-Traded REIT Transactions with Grubb & Ellis
November 01 2010 - 12:00PM
Business Wire
The Depository Trust & Clearing Corporation (DTCC) announced
today that Grubb & Ellis has completed system testing and has
begun processing transactions on DTCC’s Alternative Investment
Products (AIP) service for its two publicly registered, non-traded
real estate investment trusts (REITs), Grubb & Ellis Apartment
REIT, Inc. and Grubb & Ellis Healthcare REIT II, Inc. Grubb
& Ellis worked closely with DTCC to prepare and test the
system, and is the first non-traded REIT sponsor to utilize the AIP
service.
The AIP service links global market participants, including
broker/dealers, fund managers, administrators and custodians,
providing an end-to-end processing solution for alternative
investments such as hedge funds, funds of funds, private equity,
non-traded REITs and limited partnerships.
Traditionally, alternative investments have been handled through
hard copy, fax, email, phone calls and spreadsheets. This lack of
automation and centralization prolongs the transaction process,
making these methods inefficient and expensive. Leveraging DTCC’s
infrastructure, the AIP service streamlines, automates and
centralizes all the processes related to trade order initiation,
money settlement and post-trade reporting, bringing significant
operational efficiencies and transparency to the alternative
investments community while facilitating market growth.
“We are very pleased to have Grubb & Ellis on board as our
first non-traded REIT sponsor and we look forward to bringing
additional partners onto the platform,” said Ann Bergin, managing
director and general manager, DTCC Wealth Management Services. “As
today’s investors continue to look for new ways to diversify their
investment portfolios, our AIP service has become an attractive
solution for accessing the non-traded REIT market, making it easier
for REITs to standardize communication among their financial
advisor partners and better serve investors.”
“As a leader in the non-traded REIT industry, Grubb & Ellis
is committed to adopting the best practices and finest available
technology to benefit our investors, their advisors and our
broker-dealer partners,” said Tom D’Arcy, president and chief
executive officer of Grubb & Ellis Company. “DTCC’s AIP system
is a revolutionary step forward for our industry, and we couldn’t
be more pleased to have assisted in its successful testing and
being the first non-traded REITs to be rolled-out.”
Currently, close to 35 participants are actively testing DTCC’s
AIP service; this includes transfer agents, fund administrators,
broker/dealers and product sponsors.
The AIP service is offered by National Securities Clearing
Corporation (NSCC), a subsidiary of DTCC.
About Non-Traded REITs
Non-traded REITs are common shares offered by a real estate
company for investors. The REIT structure was designed to provide a
similar structure for investment in real estate as mutual funds
provide for investment in stocks. Like other corporations, REITs
can be publicly or privately held. Investors are typically drawn to
non-traded REITs for their potential for steady income and general
lack of volatility compared to publicly traded equities. According
to research from Blue Vault Partners LLC, non-traded REITs are on
track to raise $7 billion in 2010, a 17% increase over 2009.
About DTCC
DTCC, through its subsidiaries, provides clearance, settlement
and information services for equities, corporate and municipal
bonds, government and mortgage-backed securities, money market
instruments and over-the-counter derivatives. In addition, DTCC is
a leading processor of mutual funds and insurance transactions,
linking funds and carriers with their distribution networks. DTCC's
depository provides custody and asset servicing for more than 3.6
million securities issues from the United States and 121 other
countries and territories, valued at US$33.9 trillion. In 2009,
DTCC settled nearly US$1.48 quadrillion in securities transactions.
DTCC has operating facilities and data centers in multiple
locations in the United States and overseas.
About Grubb & Ellis Company
Grubb & Ellis Company (NYSE: GBE) is one of the largest and
most respected commercial real estate services and investment
companies in the world. Our 6,000 professionals in more than 100
company-owned and affiliate offices draw from a unique platform of
real estate services, practice groups and investment products to
deliver comprehensive, integrated solutions to real estate owners,
tenants and investors. The firm’s transaction, management,
consulting and investment services are supported by highly regarded
proprietary market research and extensive local expertise. Through
its investment subsidiaries, the company is a leading sponsor of
real estate investment programs that provide individuals and
institutions the opportunity to invest in a broad range of real
estate investment vehicles, including public non-traded real estate
investment trusts (REITs), mutual funds and other real estate
investment funds. For more information, visit
www.grubb-ellis.com.
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