Non-traded Reits Not A Hit At Merrill: Expected interest hasn't materialized for the firm's offerings in this asset class.

As real estate recovers, non-listed REITs are soaring. But they haven't been much of a hit with customers of Merrill Lynch.

Merrill Lynch announced its entry into the space late last year, becoming the first wirehouse to offer non-listed REITs in recent years. And while these equity deals raised nearly $10 billion in the first seven months of 2013, up more than 85% from the year-earlier period, according to the Investment Program Association and Robert A. Stanger & Co., Merrill's activity has lagged, says Keith Allaire, a managing director at Stanger, which provides information and research on direct investments.

Merrill's reps began selling a non-listed REIT from Jones Lang LaSalle, an investment management company specializing in real estate,...