NEW YORK (TheStreet) -- It's not surprising that the sell-off in REIT-dom is led by the institutional buyers that have a much higher degree of analyst coverage and much lower risk tolerances.Of course it goes without saying that a further rise in interest rates creates more competition for fixed-income investors, and that means oftentimes the small-cap names get ignored. Accordingly, small-cap real estate investment trusts have always been seen as riskier bets than large caps. But should they be ignored? Small-cap REITs often do not have the diverse revenue streams or stable cash flows that allow them to weather difficult economic conditions like their larger-cap counterparts, and they are also more susceptible to wide swings in price due to lower trading volumes. But does that mean they can be dangerous? Not necessarily. Oftentimes the greater volatility in a small-cap deters action and often invites selling. Because of the lack of Wall Street coverage -- and modest investor interest -- shares in small-cap REITs often remain undervalued for extended periods of time. Some Small-Cap REITs Flying Under the Radar By "flying under the radar" the small-cap REITs offer better potential for growth over the long term. Due to the decreased institutional support, there's a better chance small-cap REITs will result in an underestimation of a REIT's operational health and prospects. For those REIT investors seeking yield, the difficulty is in predicting the exact dividend policies companies will adopt in the coming years. That's a risk. As more investors enter retirement and need to replace substantial proportions of their working-years income by using their investment portfolios, a reliable dividend-yield strategy is a must. One way to mitigate the risk for the lack of a REIT's dividend history is to examine some of the former non-traded REITs. Since non-listed REITs don't trade on an exchange, the value proposition for owners and investors is to raise "blind pool" capital in a format such that companies can eventually go public and list shares. By acquiring shares in a public REIT that was formerly a non-listed REIT, an investor has the advantage of researching the dividend history and the management teams track record for managing risk. Several former non-listed REITs that appear cheap today include Chambers Street Group ( CSG), Cole Real Estate Investments ( COLE) and Whitestone REIT ( WSR). All of these publicly-traded REITs have attractive valuations based upon their price to funds from operations (or P/FFO) multiples -- a primary valuation metric for REIT investors.