Allegations of Financial Troubles, as Well as Unsuitable Investment Recommendations by Brokers, Raise Concerns

The law firm Shepherd Smith Edwards and Kantas is investigating brokers for potentially unsuitable recommendations and due diligence failures related to the $182M CAI Investments Manufacturing Essential Asset DST. The investigation follows reports that the real estate offering suspended monthly dividend payouts, requested additional capital from investors, and faces a foreclosure lawsuit on its primary Illinois facility.

If you are an investor who suffered losses in a CAI Investments Manufacturing Essential Asset Delaware Statutory Trust (DST), contact Shepherd Smith Edwards and Kantas (investorlawyers.com) today. We are looking into allegations of unsuitability and due diligence failures by the brokers that recommended and sold this Regulation D offering to customers.

There are reports that Manufacturing Essential Asset DST recently stopped paying dividends and is asking investors for more money.

What Is CAI Investments Manufacturing Essential Asset DST?

• This $182M real estate offering, also known as Manufacturing Essential Asset, DST, is involved in domestic manufacturing and industrial real estate.
• It is structured as a Delaware Statutory Trust. This means it is a real estate investment offering that allows individual investors to purchase interests in institutional grade commercial properties.
• The minimum investment requirement is usually $100K.
• CAI Investment Manufacturing Essential Asset DST offerings include MEA I and MEA II
• Brokers that sold this Regulation D private placement reportedly have earned more than $20M in sales commissions.
• Emerson Equity is listed as a registered recipient for sales commissions and compensations.

What Are The Investor Risks Involving Manufacturing Essential Asset, DST

• This Delaware Statutory Trust depends heavily on tenant U.S. Medical Glove Company.
• CAI Investments Manufacturing Essential Asset DST has a 1.5-million-square-foot industrial facility in Harvard, Illinois that is now the subject of a foreclosure lawsuit. The unpaid principal and interest reportedly is over $126M.
• There is nearly a $2.5M default judgment against US Medical Glove that was issued over unpaid electric bills. More than a dozen legal complaints have also been filed against the company or related entities. Outstanding claims are around $5.8M.
• Single-tenant exposure. This is also known as tenant concentration.
• Financial viability relies on government contracts and ongoing success.
• Facilities are specialized so re-leasing can prove challenging if tenant default occurs.
• Investors have no say in major decisions.
• Real estate investments are vulnerable to market changes, interest rate changes, the economy, and industry demand.
• Monthly distributions can be suspended or lowered.
• Brokers receive high fees and commissions that can negatively impact an investor’s principal.
• Lock-up periods, leading to illiquidity, can last for 5-10 years. There is little opportunity to get out sooner.

What Are Other CAI Investments That Are Also Under Scrutiny ?

• CAI Investments Kansas City DST
• CAI Las Vegas Hotel Partners Fund
• CAI Investments Lake Forest Global HQ DST
• CAI Investments Coatesville DST
• CAI Investments Healthcare Products I DST
• CAI Reno Hotel Partners Fund
• CAI Tempe Hotel Partners Fund

Why Are Brokers Being Investigated For Selling Manufacturing Essential Asset DST?

• There are concerns of unsuitable investment recommendations to seniors and retail customers, due diligence failures, Regulation Best Interest violations, excessive concentration, and other allegations of brokers misconduct or negligence.

• This includes possible misrepresentations and omissions regarding what your financial advisor may or may not have told you about a property and its tenant, all terms related to property debt and financing, the risks involved in a tenant’s ability to perform, and how much in fees and commissions that brokers would earn.

Representing Delaware Statutory Trust Investors Against Brokerage Firms

Shepherd Smith Edwards and Kantas is speaking with investors who have suffered losses in CAI Investments Manufacturing Essential Asset DST. We represent many Delaware Statutory Trust investors in suing their brokers for investment losses.

As a seasoned securities law firm, we understand the complexity of this type of investment and why brokers who unsuitably sell them to customers should be held liable.

Schedule Your Free Case Consultation About Your CAI Investments Manufacturing Essential Asset DST Losses Today

Call (800) 259-9010 or contact us online.