Cole Entering the Daily NAV REIT Business

Financial Advisor magazine has an article about Cole Capital's announcement of a no-load, daily liquidity REIT.  The Cole Real Estate Income Strategy is intended for fee-based advisors.  "Cole will be able to redeem shares daily because 10 percent to 15 percent of the fund will be in liquid, fixed-income assets managed by BlackRock,"says the article.

I wrote about this new product class in August.  The same applies to the Cole product, but Cole is doubling down.  By targeting the REIT to fee-based advisors, and offering it "no-load," Cole is almost guaranteeing tension between a true daily NAV (which would require appraising each property daily) and cost-based par value.  The only advantage of this structure from and investor's standpoint is the possibility of arbitraging and old appraisal.