Many Appear To Have Lost Over 50% of Their Investment in Alleged Non-Traded REIT Scam
Our non-traded real estate investment trust (non-traded REIT) investor losses attorneys are investigating The Parking REIT (now called Mobile Infrastructure Corp.) for possible investment fraud. If you are a The Parking REIT investor who would like to explore your legal options, contact Shepherd Smith Edwards and Kantas (investorlawyers.com) today.
The name change to Mobile Infrastructure Corp. occurred in late 2021. The Parking REIT is no longer a real estate investment trust nor does it have to distribute funds to stockholders any longer.
It was in July 2021 that the US Securities and Exchange Commission (SEC) filed fraud charges against The Parking REIT CEO Michael Schustek and his investment advisory firm Vestin Mortgage LLC. The regulator contends that Schustek allegedly “fraudulently enriched himself” and the Parking REIT at cost to two publicly traded REITs, Vestin Realty Mortgage I and Vestin Realty Mortgage II, which he both founded. This purportedly included channeling $29M from both of them into The Parking REIT and allegedly putting into effect “money-losing transactions” that involved six buildings being “resold” over and over.
The Commission contends that Schustek allegedly engaged in transactions that got both companies to pay him nearly $10M while purportedly misleading investors through misrepresentations and omissions.
What Is The Parking REIT?/ Mobile Infrastructure?
Established in a merger of MVP REIT and MVP REIT II in 2015, The Parking REIT/ Mobile Infrastructure invests mostly in garages and parking lots in the US. Some of the key developments:
2018: The Parking Real Estate Invest Trust suspended distributions and share repurchases for its common stockholders. This was the same year it had filed for a $100M IPO and noted that it intended to list as PARK on Nasdaq. Also, in April 2018, the Parking REIT did not file its yearly report for 2017 in the wake of an internal probe involving allegations of wrongdoing involving Shustek.
2019: A stockholder filed a class action securities fraud lawsuit related to proxy statements meant to garner shareholder approval for the MVP REIT Merger that allegedly included false and misleading statements. At least two other class action cases against The Parking REIT have since been filed. Also, The Parking REIT withdrew its IPO while claiming this was in the public interest and to protect investors. It said it would use IPO proceeds to pay back about $9.1M in debt and for other uses.
2020: The Parking REIT suspended distributions on its Series A and Series 1 Preferred Stock citing problems caused by COVID-19. The REIT also stalled on calculating its net asset value (NAV)/share).
2021: In January, with The Parking REIT having declined by more than 50% in value, it was announced that most of it would be sold to Bombe Asset Management. The deal was finalized in August, with the alternative asset management company buying almost 1.55 million The Parking Real Estate Invest Trust common shares at $11.75/share. Considering that there were investors who purchased their The Parking REIT shares at the original $25/share, and they could not sell their stock because of its illiquid nature, they likely lost more than 50% of their principal.
Also, a circuit court judge approved a $9.25 million settlement of a class and derivative lawsuit for The Parking Real Estate Invest Trust shareholders. This included up to 15% of common shares outstanding .
2022: In July, Mackenzie Realty Capital launched a tender offer to buy common stock shares for $7.25/share after a merger between Mortgage Infrastructure Trust and Mortgage Infrastructure Corporation was announced. It also offered to pay $700/share for 1 Preferred or Series A stock. The original stock offering price for this had been $1000/share.
In November Parking Real Estate Invest Trust announced that unclaimed funds in the Net Settlement Fund had been “distributed on a pro rata basis “ to all eligible Settlement Class Members.
What Can You Do If Your Broker Sold You Investments in The Parking REIT:
You can request your free, no-obligation case assessment by contacting our savvy non-traded REIT investment loss attorneys today. Here is the list of just a few broker-dealers who may have earned compensation for selling The Parking REIT that we are investigating:
- Centaurus Financial
- Crown Capital Securities
- Coastal Equities
- NI Advisors
- Great Point Capital
- Sandlapper Securities
Many investors have suffered significant losses in The Parking REIT/Mobile Infrastructure. At Shepherd Smith Edwards and Kantas, our brokerage firm negligence lawyers have found that alleged misrepresentations and omissions may have been made by the financial advisors who marketed this investment to customers. Also, for many of these investors, investing in a non-traded REIT was unsuitable for their portfolios given their risk tolerance levels, investing experience, and financial goals.
It is important that you determine whether you have grounds for a Financial Industry Regulatory Authority (FINRA) lawsuit against your broker-dealer. Non-traded REITs are alternative investments that charge high commissions and fees to brokerage firms and their financial advisors. These are risky investments that can prove illiquid and may lead to significant investment losses as it appears to have done for many The Parking REIT investors who were unable to get rid of their shares and lost over 50% of their investment. Alleged conflicts of interests may also have been at play if brokerage firms unsuitably sold this non-traded REIT to customers because the former stood to earn big commissions instead of because it was in the latter’s best interests.
Filing your own FINRA lawsuit against your broker-dealer, rather than joining a class action lawsuit against The Parking REIT, could maximize your chances for greater financial recovery.
Call Shepherd Smith Edwards and Kantas at (800) 259-9010 today.