Investors Who Weren’t Advised to Exit Before Merger Have Suffered Losses
If you are an investor who sustained losses in NorthStar Real Estate Investment Trust (REIT), now called N1 Liquidating Trust, you may want to explore your legal options to find out whether your financial advisor gave you improper advice or failed to apprise you of all of the risks involving your investment.
Our non-traded REIT investment lawyers at Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) are speaking to NorthStar REIT investors to determine whether they have grounds for a Financial Industry Regulatory Authority (FINRA) arbitration claim against their broker and/or broker-dealer.
To schedule your free, no-obligation case assessment, call SSEK Law Firm at (800) 259-9010 today.
Brokers Should Have Apprised NorthStar REIT Investors of the Risks
This publicly registered non-traded REIT invested in select equity, real estate debt, and securities investments that were mostly in the United States.
In January 2018, NorthStar Real Estate Investment Trust and affiliate NorthStar Real Estate Income Trust II merged with Colony NorthStar Inc., which survived the joining to become the publicly listed Colony Credit Real Estate (CLNC). This commercial real estate credit REIT had about $3.3B in equity value and approximately $5.1B in assets.
Unfortunately, the merger is said to have cost shareholders one-third of their investment’s original value overnight. These investors may not have been aware that leaving their position before the merger would have been to their financial advantage. The brokers that sold them these shares should have advised them accordingly.
N1 Liquidating Trust Investors Want Financial Recovery
In January 2019, N1 Liquidating Trust was set up to hold and liquidate a first mortgage loan that NorthStar REIT had previously held. Filings submitted to the SEC on October 13, 2020 state that N1 Liquidating Trust sold its only asset with the Trust, distributing the proceeds from the reduced payoff by around October 31.
According to the Trust, about $0.07 net price per unit was the distribution and this was the final distribution of the interest that unitholders held in the trust. A class action securities fraud lawsuit has since been brought against Colony Credit Real Estate by investors who purchased CLNC common stock with the merger of the three entities.
If you were a NorthStar Real Estate Investment Trust investor, you should know that your best chance of maximizing your recovery is to file your own FINRA arbitration claim under the guidance and representation of a seasoned non-traded REIT investment law firm.
Non-Traded REITs Are Illiquid and Risky
Highly risky and illiquid, non-traded REITs are unsuitable for many investors, including retail investors, many retirees, and conservative investors. Brokers should have never recommended NorthStar REIT to these types of customers to begin with.
Unfortunately, high commissions and fees can compel a financial advisor to market alternative investments even when they aren’t the right fit for a customer’s investment goals, financial profile, or risk tolerance level.
Non-traded REITs are also tough to resell once purchased and investors should expect to hold on to their shares for several years.
Financial advisors must apprise investors of the risks they are taking on and make sure that they understand them. All too often investors will say that they were blindsided by their losses and were led to believe that their investments were safe and low risk when that was, in fact, never the case.
Seasoned NorthStar Real Estate Investment Trust
Please contact SSEK Law Firm at (800) 259-9010 so we can determine if your financial advisor and their firm engaged in negligence or misconduct that contributed to you suffering NorthStar Real Estate Investment Trust/N1 Liquidating Trust losses.