NorthStarHealthcare Income REIT

Widow Retiree Sues Cetera Over NorthStarREIT II and NorthStarHealthcare Income REIT Losses

Our Non-Traded REIT Fraud Law Firm Is Representing the Claimant In Her Six-Figure FINRA Lawsuit

Shepherd Smith Edwards and Kantas (investorlawyers.com) is representing a senior investor who is suing Cetera Investment Services for up to $500,000 for losses she suffered in NorthStarHealthcare Income REIT and NorthStarREIT II (now Colony Credit Real Estate). This is an elderly retiree who entrusted the broker-dealer and one of its financial advisers, whom she met while a client at East West Bank, with a portion of her retirement money.

This investor made it clear that she did not want any undue risk and that her money was for retirement. She was assured that all investment recommendations were safe. Instead, her Cetera broker concentrated her assets in risky, unproven non-traded real estate investment trusts (Non-traded REITs) that not only came from the same issuer but also, as she alleges, were an unsuitable recommendation with risks she was never properly apprised of.

In her broker fraud claim, the Claimant is accusing the broker-dealer of unsuitability, overconcentration, misrepresentations and omissions, failure to supervise, negligence, grossly negligent behavior, breach of contract, breach of fiduciary duty, potential ongoing fraud, and more.

Non-Traded NorthStar REITs Leave Investors With Losses

NorthStarHealthcare and NorthStarREIT II are private placements that should only have been sold to sophisticated investors who have a high risk tolerance level. Unfortunately, it appears that the high commissions broker-dealers can earn from selling these alternative investments may have compelled some of them to unsuitably market the non-traded REITs to investors even when it was not in their best interests.

Problems ensued when NorthStarREIT II and NorthStar REIT merged with Colony NorthStar Inc. to form Colony Credit Real Estate in 2018. Public records indicate that this cost shareholders one-third of their investment’s original value overnight. The final net price per unit for the final distribution of interest in the trust was seven cents.

Distributions were later suspended, and shareholders were told that they could only buy back shares in connection with a stockholder’s death or qualifying disability.

As for NorthStar Healthcare Income, in early 2019, the non-traded REIT stopped investor distributions and, in 2020, lowered its estimated net asset value to $3.89/share.. In June 2025, Welltower acquired NorthStar Healthcare REIT’s 40 senior housing communities in a $900M all-cash transaction for $3.03/share. Investors who bought into the REIT at the initial 10/share offering price lost 70% of their principal investment.

This Investor Is Suing Cetera in FINRA Arbitration

This Claimant is looking at serious portfolio losses. This investor alleges that when she brought up her concerns to Cetera, the Respondent asserted that she should not take legal action and that the broker-dealer would be suing NorthStar for her and other clients. It wasn’t until this year that a senior executive with Cetera told her that such a lawsuit was unwinnable.

Unfortunately, broker-dealers would rather deny your investor loss claim than pay you damages. The possibility of securing a decent financial recovery by going after the issuer of an alternative investment is unlikely. What may be able to do is sue the brokerage firm for negligence in FINRA arbitration while being represented by a seasoned securities law firm.

Contact Our Non-Traded REIT Recovery Law Firm Today About Your NorthStar REIT II and NorthStarHealthcare Income REIT Losses

Shepherd Smith Edwards and Kantas represents investors in arbitration, mediation, and litigation. More than 90% of our clients have received full or partial financial recovery. We have the skills, resources, and experience to build a solid claim for you while protecting your legal rights.

Call (800) 259-9010 or fill out this form to schedule your free first consultation.