Which statement about nontraded REIT valuations is true?

Which statement about nontraded REIT valuations is true?

• A. They are updated daily
• B. They are fixed at initial offering
• C. Valuations required only every 18 months
• D. They always trade on exchange

Answer: (C)

Nontraded REIT valuations reflect the reality that there is no active secondary market for their shares. Because shares aren’t traded on an exchange, there isn’t a daily market price to update. Instead, value per share is determined periodically by independent appraisers and internal valuation methods, and the update cadence is set by the offering terms or regulatory guidance. Among the given statements, stating that valuations occur on a defined schedule (every 18 months) best matches this periodic nature, since it rejects the idea of daily updates, a fixed price at the initial offering, or any public exchange trading. In practice, valuations are carried out at intervals such as annually or on a staggered schedule, but the key idea is that updates are periodic rather than continuous, which is why this option is the most accurate reflection of how nontraded REITs are valued.

Nontraded REIT valuations reflect the reality that there is no active secondary market for their shares. Because shares aren’t traded on an exchange, there isn’t a daily market price to update. Instead, value per share is determined periodically by independent appraisers and internal valuation methods, and the update cadence is set by the offering terms or regulatory guidance. Among the given statements, stating that valuations occur on a defined schedule (every 18 months) best matches this periodic nature, since it rejects the idea of daily updates, a fixed price at the initial offering, or any public exchange trading. In practice, valuations are carried out at intervals such as annually or on a staggered schedule, but the key idea is that updates are periodic rather than continuous, which is why this option is the most accurate reflection of how nontraded REITs are valued.