NEW YORK ( TheStreet) -- In light of the illiquid attributes and up-front fees associated with the non-listed REIT sector, investors continue to pursue shares in real estate not directly correlated with the stock market. For many non-traded REIT investors, the attraction to the lower volatility and higher yields offered by these products outweigh the risks of higher up-front fees.This growing non-listed real estate sector, with approximate assets under management of around $70 billion, expects to raise around $18 billion in 2013 -- a 42% increase over the $10.3 billion raised in 2012. The significant evolution in this REIT sub-sector has been driven by the financial advisors and broker dealers who have embraced the product offerings and sponsors in an effort to diversify the number of available offerings. Recently I caught up with Kevin T. Gannon, Managing Director of Robert A. Stanger & Co., an investment bank focused on the Non-Traded REIT industry. Gannon has been with Stanger since 1983 and he is a leading expert in the Non-Traded REIT industry. Thomas: In 2000 Non-Traded REITs hardly existed, yet today the industry is booming with sales estimated to exceed $18 billion in 2013. What is the primary force behind the demand? Gannon: We attribute the increase in demand to two fundamental factors, the performance of recent full cycle Non-Traded REITs and the recycling of capital from successful programs into new programs. In the past 18 months, American Realty Capital (ARCP), W.P Carey (WPC), Cole Real Estate (COLE) and Healthcare Trust of America (HTA) have monetized programs at premiums to the original $10 issue price of such offerings and investors have rewarded the sponsors with the commitment of additional capital to new programs. Thomas: Let's talk about liquidity. The main reason that Non-Traded REIT investors are attracted to the sector is because of the low volatility and the reciprocal relationship of illiquidity. Over the years has the industry become more liquid? Gannon: There has been some improvement in liquidity in the Non-Traded REIT space as programs now offer a share repurchase program to investors during the offering period. Additionally, we are seeing programs move to list on established stock exchanges more quickly after the close of an offering than we had seen in the past. This phenomenon has had a very positive impact on the perception on Non-Traded REIT, in our view.