NAV REIT And Real Estate Interval Funds Suspended

Advisor Group Suspends Real Estate Investment Product Sales

Another brokerage firm has temporarily stopped selling real estate products due to the Coronavirus (COVID-19) has causing valuation issues. Advisor Group’s decision to suspend the sales of real estate interval funds and NAV real estate investment trusts (NAV REITs) comes soon after another independent brokerage-dealer (IBD), LPL Financial, announced that it was suspending its sales of a number of nontraded REITs and publicly traded property interval funds.

The temporary cessations are counter to what IBDs did prior to the 2008 economic crisis when they sold a lot of real estate investments that were illiquid. These investments later saw their prices take a nosedive at great cost to investors.

These suspensions, however, may be too little too late for some investors. Shepherd Smith Edwards and Kantas (SSEK Law Firm) is currently speaking to Advisors Group customers, as well as LPL customers, who invested highly in illiquid real estate investments and have since suffered substantial investment losses.

And yes, while COVID-19 is adversely affecting the economy and the markets, you may have grounds for a broker fraud claim to recover the losses if your registered representative:

Misrepresented risks to you
Recommended illiquid investments even if they were unsuitable
Overconcentrated your brokerage account
And/or their broker-dealer failed to properly supervise them

SSEK Law Firm represents investors throughout the United States. Contact our REIT fraud lawyers today.

Which Interval Funds and NAV REIT Funds Have Been Suspended By Advisor Group?

Below is a list of the funds that Advisor Group has currently suspended due to the volatile impact that COVID-19 has had on the stock market.

Suspended Interval Funds

BlueRock Total Income+ Real Estate Fund
Griffin Institutional Access Real Estate Fund

Suspended NAV REIT Funds

Black Creek Industrial REIT IV Inc.
Jones Lang LaSalle Income Property Trust Inc
CIM Income NAV Inc
Blackstone Real Estate Income Trust
Hines Global Income Trust Inc.

According to InvestmentNews, Advisor Group said that because of the pandemic, there is a greater risk of clients paying higher premiums on new purchases of NAV REITs and real estate interval funds.

NAV REITs are not as liquid as real estate trusts that are publicly listed. Meanwhile, interval funds have stricter timing redemption limits than investment funds and real estate trusts that are publicly traded. The broker-dealer is continuing to monitor alternative investments.

Moody’s Downgrades Rating For Advisor Group

It was just last month that Moody’s Investor Services issued a credit downgrade for the firm, dropping its corporate family rating for Advisor Group Holding-issued debt from B2 to B3. It also revised the broker-dealer’s outlook from “stable” to “negative”.

The move came just two months after Advisor Group had gotten confirmation of its B2 rating after a review involving its $1.3B deal to purchase brokerage firm, Ladenburg Thalmann. Advisors Group is comprised of four other broker-dealers including FSC Securities, Royal Alliance Associates, Woodbury Financial Services and SagePoint Financial.

Last year at least 40 investors accused Advisor Group and FSC Securities broker, Craig Accardo, of failing to advise them of the risks involved in some of the more illiquid investments in their portfolio. Accardo, and two other FSC Securities stockbroker, Frank Briseno III and Frank Briseno IV, purportedly earned 5-10% commissions from selling alternative investments and variable annuities to customers.

The investors are accusing FSC Securities of overconcentrating their portfolios in too many of these high-risk investments that were not suitable for them.

Real Estate Investment Fraud Claims

Please contact our real estate investment fraud attorneys so that we can help you explore your legal options. Over the years, including during some of the toughest economic times that we’ve had to face together, SSEK Law Firm has been there for investors. Allow us to help you determine whether you have grounds for a REIT fraud claim. Even during this pandemic, we remain hard at work for our clients.