Simpson Thacher Authors Comment Letter Advocating for Broader Access to Real Estate Investments for Retail Investors
06.02.25
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Simpson Thacher recently submitted a comment letter (the “Comment Letter”) in connection with the proposed revisions (the “Proposal”) to the North American Securities Administrators Association (“NASAA”) Statement on Policy Regarding Real Estate Investment Trusts (the “NASAA REIT Guidelines”), in which it advocated for broader access to real estate investments for retail investors. The Comment Letter acknowledges the meaningful revisions made to the Proposal following the previous comment period in 2022, while encouraging NASAA to consider additional modifications to the Proposal. In particular, the Comment Letter recommends the elimination of the proposed concentration limits on individual investor portfolios to facilitate retail investor access to real estate investments or, alternatively, recommends certain changes to the concentration limits, including a categorical exemption for both “accredited investors” and investment programs that provide quarterly liquidity. It argues that the concentration limit set forth in the Proposal will arbitrarily limit retail investors from accessing investment opportunities that can diversify their portfolios, and will continue to result in more sponsors seeking alternative structures that are not subject to state regulation to ensure their products are available to suitable retail investors that seek such diversification. It further acknowledges the Firm’s viewpoint submitted in its previous comment letter that a systematic substitution of judgment by state administrators in place of the judgment of the individuals that the Proposal purports to protect is not a wise policy decision.
The letter was primarily drafted by Partners Rajib Chanda, Benjamin Wells, Daniel B. Honeycutt and Evan Hudson, and Associates Alexa Shockley and Sally Nicholas.
To read the full letter, please click here.