Earlier this year the board of Piedmont Office Realty Trust, the fifth largest nonlisted REIT in terms of total assets, announced that the company had allocated $100 million for share repurchases which had been suspended since mid-2008. Of this amount, 30% was set aside for share redemptions due to death or required minimum distributions under Internal Revenue rules. When the company’s repurchase plan was reopened in April 2009, shareholders seized upon this opportunity by submitting an unprecedented number of redemption requests. As a result, the company was only able to repurchase up to 2000 shares of each redemption request and its redemption program has been closed for the remainder of this year. All unmet redemption requests will remain on file with the company’s transfer agent and will be processed when this program is reopened. The company will continue to redeem shares submitted for redemption as a result of deaths and required minimum distributions.
At this point the six largest nonlisted REITs have shut down their share repurchase programs. The other five companies include Inland American Real Estate Trust, Inland Western Retail Real Estate Trust, Wells Real Estate Investment Trust II, Behringer Harvard REIT I and Cole Credit Property Trust II.
Other nonlisted REITs that have either stopped repurchasing shares or been unable to repurchase all the shares submitted include Behringer Harvard Opportunity REIT I, Desert Capital REIT, Dividend Capital Total Realty Trust, Grubb & Ellis Apartment REIT, KBS Real Estate Investment Trust and Whitestone REIT.