REITs are financial products with underlying real-estate assets expected to appreciate, assets that might include, for instance, apartment buildings, developments, mortgages, etc. Non-traded REITs are not freely traded on any exchange. Investors must rely on the issuing company for evaluations, which are difficult if not impossible to independently verify. As a category, the reputation of non-traded REITs turned sour beginning around 2010, after an influx of billions of yield-seeking investments dollars in 2008. Common to many non-traded REITs are complaints of high commissions and management fees, undisclosed risks, and unexpected liquidity problems.
“Timberland” is not just a pleasant-sounding brand name. Started in 2006, this REIT now manages about 300,000 acres of commercial timberland in central Georgia and Alabama. Its history, however, includes FINRA assessing a sizable $300,000 fine in 2011 for making misleading statements in its promotional materials, along with other issues discovered in a lengthy investigation. More recent events in 2013 include a downward adjustment in the share price and resignations from the board of directors. Interested investors are encouraged to do their own research into the REIT and its founder, Leo F. Wells III.