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Articles Tagged with Non-traded REITs

Resource Real Estate Opportunity REIT and REIT II Shares Reportedly Trading Under NAV Price 

With shares in Resource Real Estate Opportunity REIT and Resource Real Estate Opportunity REIT II reportedly trading privately at lower prices than their net asset value (NAV), some investors may be wondering why they were never fully apprised of all the risks.

The news of the lower than NAV trading prices comes several months after both non-traded real estate investment trusts announced they were partially suspending share redemptions amidst their plans to merge with Resource Apartment REIT III, Inc.

Unsuitable Investment Recommendation May Be a Factor in Brokerage Firm Customers’ Losses  

Investors in RW Holdings NNN REIT, Inc., a non-traded real estate investment trust formerly called the Rich Uncles NNN REIT, have suffered significant losses this year.

Not only did RW Holdings NNN REIT announce in May 2020 that it was suspending its offering and plans to revise its net asset value (NAV)/share, but also, any NAV and distribution rate would likely be lower in the wake of the impact that COVID-19 is having on the markets. The company pointed to its inability to collect 100% of all contractual rents because of the pandemic as a reason for re-evaluating its distribution rate. 

NorthStar Healthcare Investors Should Explore Legal Options to Recover Losses

Eighteen months after NorthStar Healthcare REIT suspended distributions, investors are still grappling with the losses they’ve sustained. Now, the non-traded real estate investment trust’s (non-traded REITs) share price appears to have lost most, if not all, of its value.

If you are a Northstar Healthcare investors, our non-traded REIT fraud lawyers at Shepherd Smith Edwards and Kantas (SSEK Law Firm) would like to help you explore your legal options. You very well may have grounds for a broker negligence claim to recover your losses and damages. 

Non-Traded Real Estate Investment Trusts Are Risky, Illiquid 

If you are a retail investor in San Francisco whose broker is recommending that you invest in non-traded real estate investment trusts (non-traded REITs), you should strongly reconsider. 

While often touted as a security that allows investors to make money without having to worry about market volatility – this type of investment is actually still high risk, illiquid, and not suitable for many customers including retail investors, retirees, and other conservative investors with low-risk tolerance levels.

Preferred Apartment Communities Investors Pay High Commissions

Throughout the United States, our non-traded real estate investment trust (REIT) attorneys at Shepherd Smith Edwards and Kantas (SSEK Law Firm) are speaking to investors whose registered brokers or investment advisors persuaded them to invest in Preferred Apartment Communities, which is a non-traded REIT. 

This investment has paid stockbrokers up to 7% commission and comes with additional fees, including around 4-5% in brokerage firm fees and offering costs. 

NEXT Financial Group Sold Unsuitable REITs To Investors, Including Older Seniors 

If you were an investor who suffered losses in Real Estate Investment Trusts (REITs) that were recommended and sold to you by a NEXT Financial Group broker, Shepherd Smith Edwards and Kantas (SSEK Law Firm) wants to talk to you. 

The Houston-based independent brokerage firm was recently fined $150K by the Massachusetts Securities Division for selling REITs to investors even when these investments were not suitable for them. 

Centaurus Financial Broker Named In Multiple Customer Disputes 

If you suffered substantial investment losses while Centaurus Financial broker, Katherine Nishnic, was your registered representative, please contact Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm). We can help you determine whether you have grounds for a broker fraud case. According to her BrokerCheck record, Nishnic is already the subject of at least eight customer disputes

She has been in the industry for 25 years and a Centaurus broker for four years. Previous to that, Nishnic was registered as a broker for JP Turner and before that with GunnAllen Financial, First Allied Securities, DE Frey & Co., Merrill Lynch and Pierce Fenner and Smith.  

Did you invest with Centaurus Financial, Inc. or J.P. Turner & Co., Inc. and suffer losses in Structured CDs, Structured Notes, Non-Traded Real Estate Investment Trusts (“REITs”), or other investments?  If so, we may be able to help you recover your losses.

The Doss law firm and Shepherd, Smith, Edwards & Kantas are investigating claims on behalf of investors, many of which are retired and current Flour Corp. employees, who have suffered losses at the hands of Centaurus financial advisors who were formerly with J.P. Turner.  Those advisors, in many cases, mismanaged client investment accounts by placing them in high-risk and illiquid structured CDs, structured notes, non-traded REITs and other complicated investments.

Structured products, such as structured CDs and notes, are very complex and highly risky investments that are rarely suitable for most investors.  Similarly, non-traded REITs and other private placement investments are illiquid and risky investments that are not appropriate for most individual investors, especially retirees.  These investments are often sold as being safe and paying higher interest rates than most other investments.  However, the promised higher rates are often only guaranteed for a short time – typically a year – and are much riskier than more traditional investments.  Additionally, with most private placements, the supposed interest payments are often just a return of the investor’s own money, not a rate of return for the investment.  Ultimately, these investments typically lock investors into them long-term, resulting in limited income and often substantial losses.

If you are an investor in NorthStar Healthcare Income, you very likely received a letter last month notifying you that monthly distributions from this investment have been suspended. According to NorthStar’s board, the publicly registered nontraded real estate investment trust’s (nontraded REIT) portfolio has been undergoing “operational and performance challenges” that as of the end of June 2017 has resulted in a “lower estimated value/share” of the NorthStar Healthcare’s common stock. The nontraded REIT has since determined that in order to protect both capital and its financial state, suspension of these distribution payments is necessary.

The NorthStar Healthcare Inc. nontraded REIT was set up to originate, acquire, and oversee healthcare industry-related investments, including debt, equity, and securities investments involving healthcare real estate. Sources note that between 2013 and 2018, it raised about $2B and set up a portfolio involving more than 650 properties.

However, NorthStar Healthcare Income began reducing distribution rates in December 2017. By October of last year, it had notified investors that it would only buy back shares from an investor if qualifying disability or death were factors. In December 2018, the nontraded REIT reduced its net asset value from $8.50/share to $7.10/share. Now, with the distribution suspension, some investors are standing to lose not just their monthly distributions, but also they could see a substantial decline in value on their principal that they originally invested.

A Financial Industry Regulatory Authority Inc. panel says that AIG Advisor Group (AIG) subsidiary Royal Alliance Associates Inc. must pay $1.4 million to three retirees who claim that the brokerage firm was negligent when supervising the sales of variable annuities and nontraded real estate investment trusts.

The investors, who were former AT & T Inc. employees, claim that ex-broker Kathleen Tarr recommended that they take a lump-sum buyout from the communications company instead of a lifetime annuity. The money was then put into non-traded REIT company Inland Real Estate, as well as different variable annuities.

Tarr’s BrokerCheck record shows that she has been named in about forty customer disputes and complaints. She was let go from Royal Alliance in 2010.

The claimants, who are low-wealth, low-income seniors, believe that they should not have been encouraged to take a lump sum and place their funds into non-traded REITs and variable annuities involving an IRA. Even though they did not sustain out-of-pocket losses from the investment recommendations, the retirees purportedly lost out on earnings they would have made if only they had invested their money more reasonably or opted for the lifetime annuity. With the latter, an investor would have given over a lump sum figure in return for a guaranteed payout for the duration of his/her life.
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