Behringer Harvard Opportunity REIT I: Value Sinks

Like a number of non-traded real estate investment trusts (REITs), Behringer Harvard Opportunity REIT I has plummeted in value – to $4.12 per share as of the end of 2011. That’s a drop of an astonishing 46% from one year ago.

As reported Jan. 12 by Investment News, Behringer Harvard Opportunity REIT I has been experiencing issues since 2009, when its value was priced at $10 per share. Shareholders were told that the new valuation was the result of the recent economic downturn and its impact on the property industry.

Behringer Harvard is a big player in the non-traded REIT industry. According to an Investment News ranking of non-traded REITs, Behringer Harvard REIT I is the fourth-largest in terms of invested assets, with nearly $4.2 billion in real estate assets.

Like the Behringer Harvard Opportunity REIT I, the per share value of the Behringer Harvard REIT I also has taken a beating from its initial $10 offering price. In December, its valuation was $4.64 per share.

Meanwhile, Behringer Harvard says the share valuations’ similarities of Behringer Harvard REIT I and Behringer Harvard Opportunity REIT I are not indicative of future performance. According to the Investment News article, the company characterizes the valuations of the two REITs as “purely coincidental.”

Non-traded REITs have been in the spotlight for some time now. Both the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) have issued investor alerts on the products, cautioning investors about various risks, illiquidity issues, the lack transparency, limited and lengthy redemption periods, as well as the high commissions and other upfront fees and charges that non-traded REITs command.