DTCC Connection

Jul 01, 2011 • DTCC Connection

AIP Service Continues to Expand Non-Traded REIT Market

by Richard Marulanda


Grubb & Ellis Healthcare REIT II has become the first non-traded real estate investment trust (REIT) to connect both qualified and non-qualified investor accounts to DTCC’s Alternative Investment Products (AIP) service via Pershing LLC’s platform. This breakthrough brings additional transparency, operational efficiency and standardization to the non-traded REIT market.


The AIP service provides significant efficiencies to a firm’s operations and supports market growth through an automated, centralized platform. It links broker/dealers, fund managers, administrators and custodians, and provides end-to-end processing of alternative investments. In addition to nontraded REITs, these include hedge funds, funds of funds, private equity and limited partnerships, among others. The service leverages DTCC’s infrastructure to streamline all the processes related to trade-order initiation, money settlement and post-trade reporting.


Jeff Hanson, chairman and CEO, Grubb & Ellis Healthcare REIT II

“Grubb & Ellis Healthcare REIT II is committed to adopting the best practices and the finest available technology to benefit our investors, their advisors and our broker/dealer partners,” said Jeff Hanson, chairman and CEO of Grubb & Ellis Healthcare REIT II. “Our participation in DTCC’s AIP service via Pershing’s platform is a huge step forward for our company and for the entire non-traded REIT industry, allowing advisors to more efficiently provide and service their clients’ alternative investment needs.”


The non-traded REIT market added 15 new funds in 2010, reaching a total of 61 with an estimated $71 billion in assets, according to Blue Vault Partners LLC, an Atlanta-based research firm that tracks non-traded REITs. The firm reports that the industry pulled in a total of $8.1 billion in new capital from investors in 2010, up 25% from 2009 levels.


Scalability and reduced risk

“We are very pleased to expand our relationship with Grubb & Ellis Healthcare REITT II,” said Ann Bergin, DTCC managing director and general manager, Wealth Management Services. “Including both qualified and non-qualified Pershing accounts on a unified platform such as AIP signals a significant advance for the non-traded REIT market and illustrates the confidence the market has in AIP’s ability to bring efficiency, scalability and reduced risk to the alternatives market.”


The AIP service is an offering of DTCC’s National Securities Clearing Corporation (NSCC) subsidiary. In November 2010, DTCC announced that Grubb & Ellis Healthcare REIT II was the first non-traded REIT to utilize the AIP service. As of early June, 17 companies are live on the platform and 50 are in testing, including 7 nontraded REITs.


Pershing LLC, a BNY Mellon company, is one of AIP’s charter clients.


About Grubb & Ellis Healthcare REIT II

Grubb & Ellis Healthcare REIT II is seeking to raise up to approximately $3 billion in equity and to acquire a diversified portfolio of real estate assets, focusing primarily on medical office buildings and other healthcare-related facilities.


It is sponsored by Grubb & Ellis Company, one of the world’s largest and most respected commercial real estate services and investment companies. For more information, visit www.grubbellis. com.@


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