Moody National REIT II Announces Postponement of Valuation Shares

More Bad News for The Non-Traded REIT’s Investors 

Publicly registered non-traded real estate investment trust, Moody National REIT II, announced in August 2021 that its Board had made the decision to postpone the valuation of its shares. Considering that the non-traded REIT has not updated its net asset value (NAV) since December 2019, this announcement is cause for further concern for investors. 

Our securities fraud attorneys have been speaking to investors of this non-traded REIT who have suffered significant losses, most of whom likely paid $25/share. Contact Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) today at (800) 259-9010 so that we can help you explore your legal options. 

What is Moody National REIT II?

Mostly investing in securities and hotels (particularly properties under renowned brands such as Marriott and Hilton), Moody National REIT II is a highly illiquid and costly non-traded REIT. It raised red flags almost two years ago in March 2020 after suspending its distribution reinvestment plan and share repurchase program. Moody claimed that the pandemic had seriously lowered demand in the hotel sector. 

  • May 2020: Mackenzie Realty Capital announced a tender offer to purchase Moody National REIT II shares at $5/share.
  • March 2021: Moody National REIT II shares were going for about $10/share, a 60% drop from $25/share. Its Board also announced in its yearly report that it would no longer be able to give an accurate estimated share value. This made it hard for investors to know how much their shares were worth. 
  • April 2021: Account statements listed the non-traded REIT as N/A. 

High Commissions, Blind Pool Investing, and Conflicts of Interest 

It doesn’t help that Moody National REIT II started as a blind pool. This means that investors had no chance to assess future investments ahead of time. 

Not only that, but the firms and financial advisors who marketed and sold this non-traded REIT earned high commissions. Add other fees and offering costs into the mix and less than 87% of investors’ money actually went toward Moody National REIT II investments. 

There have also been reports of conflicts of interest between Moody, advisors, and others. Unfortunately, the lure of high commissions can make it tempting for brokers and investment advisors to sell investments to customers for whom they are unsuitable

Only investors who had the risk tolerance level for this non-traded REIT should have purchased its shares. However, it appears that retail investors, inexperienced investors, conservative investors, and retirees who did not were also sold this product by their financial advisors. 

Working With Skilled Investment Fraud Lawyers 

For over 30 years, SSEK Law Firm has helped many investors of all experience levels in recovering the investment losses sustained because of broker misconduct and broker-dealer negligence. 

Regardless of COVID-19, many Moody National REIT investors should have never been sold this investment. SSEK Law Firm has helped thousands of investors to recover their losses through FINRA arbitration, mediation, and litigation. Call us at (800) 259-9010 today.

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