Behringer Harvard Opportunity REIT I is not the only Behringer Harvard REIT that has run up on the rocks. In January 2011, Behringer Harvard announced a revised estimated share value of $4.55 per share for another REIT - Behringer Harvard REIT I. This was a 30 cent increase from the $4.25 estimated valuation offered by Behringer Harvard on May 18th 2010, but still less than half of the roughly $10 per share that investors paid.
Similarly, Behringer Harvard Mid-Term Value Enhancement Fund I, another Behringer Harvard non-traded REIT, recently reset the value of its common shares to $6.46, even less than the $7.09 valuation estimate made in December 2009, and well below the $10 paid by its investors.
Meanwhile, Behinger Harvard REIT management was busy giving properties back to the bank and restructuring mortgage loans. Foreclosure actions initiated in 2010 included One Financial Plaza in Minneapolis, which Behringer Harvard bought for $57.1 million (it's now 60% leased and estimated to be worth about $20 million), Ferncroft Corporate Center in Middleton, Massachusetts, the Aston Kauai Beach hotel (now known as the Courtyard by Marriott at Coconut Beach), and the Paces West office complex located in the Buckhead section of Atlanta. Behringer Harvard bought the Paces West property in 2006 for $104 million, or about $176/sf. The two-building property was recently only 82% occupied.
At the same time, Behringer Harvard's Multifamily REIT I was maniacally trying to buy its way out of a highly-leveraged mess that management began cooking up in 2006. Despite a frantic buying spree in 2009 and 2010, when prices were theoretically more favorable, Behringer Harvard Multi-Family REIT I is still unable to produce even a penny of positive cash flow, or positive funds from operations. Nevertheless, the REIT's board approved a 6% "dividend" to investors in 2010. This translated into an estimated payout ratio of over 600% (as a percentage of FFO), which Behringer Harvard funded by borrowing even more money from shareholders and banks. You can read more about [url=http://www.reitwrecks.com/forum/viewtopic.php?f=2&t=31]Behringer Harvard's toxic distribution policy here.[/url]
In fact, not one of the Behringer Harvard's non-traded REITs managed to produce positive funds from operations in 2010, and only one of them, Behringer Harvard Opportunity REIT I, even had positive cash flow. All of them experienced full year declines in book value vs. Q1 2010.
Despite these thoroughly pitiful results, Behringer Harvard is ready to try again with a new REIT! This new REIT will be called "Behringer Harvard Multi-Family REIT II". BH will probably manage to get this REIT onto the platform of a few desperate independent broker dealers by paying them
Given Behringer Harvard's track record with non-traded REITs, and the number of new entrants now competing for shelf space, how can any broker dealer