Article Excerpt:
TWST: What is Vestin Realty Mortgage II?Mr. Aalberts is the editor-in-chief of the Real Estate Law Review Journal. He has taught law in Louisiana. He currently is a professor at the University of Nevada, Las Vegas. Our Head of the Audit Committee is Rick Zaffarese. Rick currently works with the US government in the Department of the Interior. He is a licensed CPA. Since we're in the real estate business, we felt very strongly that we should put someone who has many years of development experience and currently has over 600,000 square feet of construction underway on our team. The company makes first mortgages only. We do short-term mortgages. As I stated earlier, what makes ours unique is that we can fund any loan up to about $20 million in six or 10 business days, compared to banks taking maybe three to four months. People who need to close in a hurry or whose bank financing fell out come to Vestin. We get anywhere between 30 and 60 requests each month to fund loans. We usually take the top two to four deals each and every month.
TWST: What historically has been the shareholder base? Has that base
undergone any changes?
Mr. Shustek: Yes, absolutely. One of the reasons it was set up as Vestin
Fund II was because myself and my staff raised all the money. The
shareholder base was all retail. It consists of about 4,500 individuals.
When Vestin Fund II was set up, it didn't have liquidity. The only way
investors could get liquidity was to dispose of approximately 10% of the
fund balance each year. So this fund at one time was up to about $440
million of assets, and then we had to handle the redemptions, so 10% was
redeemed. While the fund was dwindling and people wanted to redeem at a
quicker pace, the Board of Directors came up with the idea of converting
it to a REIT so our shareholder base could have liquidity. To cut to the
chase, we have had a large pent-up demand for liquidity. So when we
started trading on May 1, it was a great chance for people to view
Vestin Realty Mortgage. Here you have a company that has been reporting
for 20 quarters, is not leveraged, and has been profitable each and
every year. As of June 8, this company is trading at about a 40%
discount to book value, and that is an anomaly. Right now, out of the
5,000 publicly trading companies, it's hard to find a company that has
been profitable each and every year for five years, pays the dividend
and is not leveraged, trading at such a discount to book. Currently,
it's trading at a $104 million discount to book value, and it's a $277
million company.
Tickers included in this excerpt: VRTA, VRTB
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