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Correspondence

The Contrarian Real Estate Investment Trust

May 18, 2009

United States Securities and Exchange Commission

450 Fifth Street NW

Mail Stop 4561

Washington, D.C. 20549

    Attn:

    Ms. Cicely Lomothe, Accounting Branch Chief

    Ms. Jaime John, Staff Accountant

    Ms. Kristina Aberg, Attorney-Advisor

    Re:

    NetREIT

    Form 10

    Filed May 6, 2008

    File No. 001-39049

Ladies and Gentlemen:

Registrant requests the Accounting Staff’s comments and guidance regarding Registrant’s responses
below to the comments in the Staff’s letter of May 5, 2009 regarding the above-referenced Form 10
filing. Registrant’s is providing Staff with the disclosures made relative to the land purchase
option within the financial statements for the years ended December 31, 2008 and 2007 and the
quarter’s ended March 31, June 30 and September 30, 2008. In addition to the additional
disclosures, the Registrant has reported the $1,370,000 as a separate line item on the balance
sheet’s as “Land purchase option” for all periods presented.

Registrant’s responses below are presented in the same numbers as the Staff’s comments in that
letter.

Financial Statements and Notes

Note 2 — Significant Accounting Policies

Property Acquisitions, pages 62-63

The following are excerpts from the Significant Accounting Policies that have been changed to
reflect the suggestions contained in the Staff letter:

To the points of (a) that we did not acquire land but rather a purchase option to acquire
land at a future date; (b) that the $1.4 million allocated represents the portion of the
purchase price allocated to the option; (c) our basis for assigning an indefinite useful
life; and (d) the probability of exercising the option we have disclosed the following:

The land lease acquired with the World Plaza acquisition in 2007 has a fixed purchase
price option cost of $181,710 at the termination of the lease in 2062. In accordance
with SFAS No. 142, “Goodwill and Other Intangible Assets” (“SFAS 142”) management
valued the land option at its residual value of $1,370,000, based upon comparable
land sales adjusted to present value. The difference between the strike price of the
option and the recorded cost of the land purchase option is approximately $1.2
million. Accordingly, management has determined that exercise of the option is considered probable. The land purchase
option was determined to be a contract based intangible asset associated with the
land. As a result, this asset has an indefinite life and is treated as a
non-amortizable asset. The amount is included as land purchase option on the
accompanying condensed balance sheets.

1282 Pacific Oaks Place, Escondido, CA 92029 • Phone 866-781-7721 • Fax 760-471-0399 • info@netreit.com

The Contrarian Real Estate Investment Trust

Further to the point of clearly stating that the land purchase option is an allocation of
the purchase price paid for the World Plaza an excerpt from Note 4 to the financial
statements — “REAL ESTATE ASSETS AND LEASE INTANGIBLES” reads as follows:

In accordance with SFAS 141, the Company allocated the purchase price of the
properties acquired during the years ended December 31, 2008 and 2007 as follows:

    Land

    Tenant

    Tenant

    Total

    Purchase

    Buildings

    Improve-

    In-place

    Leasing

    Relation-

    Purchase

    Land

    Option

    and other

    ments

    Leases

    Costs

    ships

    Price

    $
    1,370,000

    $
    6,006,891

    $
    118,803

    $
    65,211

    $
    89,774

    $
    7,650,679

To the point of disclosing the Company’s impairment policy under paragraph 17 of SFAS 142
our disclosure remained unchanged and for the financial statements as of and for the years
ended December 31, 2008 and 2007, read’s as follows:

Intangible Assets — Lease intangibles represents the allocation of a portion of the
purchase price of a property acquisition representing the estimated value of in-place
leases, unamortized lease origination costs, tenant relationships and a land purchase
option. Intangible assets are comprised of finite-lived and indefinite-lived assets.
In accordance with SFAS 142, indefinite-lived assets are not amortized. Finite-lived
intangibles are amortized over their expected useful lives. The Company assesses its
intangibles and goodwill for impairment at least annually.

In accordance with SFAS 142, the Company is required to perform a test for impairment
of goodwill and other definite and indefinite lived assets at least annually, and
more frequently as circumstances warrant. Based on the review, no impairment was
deemed necessary at December 31, 2008 or 2007.

Other intangible assets that are not deemed to have an indefinite useful life are
amortized over their estimated useful lives. The carrying amount of intangible assets
that are not deemed to have an indefinite useful life is regularly reviewed for
indicators of impairments in value in accordance with SFAS No. 144, “Accounting for
the Impairment or Disposal of Long-Lived Assets.” Impairment is recognized only if
the carrying amount of the intangible asset is considered to be unrecoverable from
its undiscounted cash flows and is measured as the difference between the carrying
amount and the estimated fair value of the asset. Based on the review, no impairment
was deemed necessary at December 31, 2008 or 2007.

Conclusion: The disclosures regarding the land purchase option are transparent to the reader and
conform with GAAP.

1282 Pacific Oaks Place, Escondido, CA 92029 • Phone 866-781-7721 • Fax 760-471-0399 • info@netreit.com

The Contrarian Real Estate Investment Trust

The Company filed its amendment No. 3 to its Form 10 last Friday, May 15, 2009. A copy of the
amendment marked to show changes since amendment No. 3 is enclosed herewith.

Very truly yours,

KENNETH W. ELSBERRY

CHIEF FINANCIAL OFFICER

    cc:

    Ms. Jaime John, Staff Accountant

Ms. Cicely Lamothe, Accounting Branch Chief

Ms. Kristina Aberg, Attorney-Advisor

Mr. Tom Kluck, Legal Branch Chief

1282 Pacific Oaks Place, Escondido, CA 92029 • Phone 866-781-7721 • Fax 760-471-0399 • info@netreit.com