Moody National REIT II
This publicly registered non-traded real estate investment trust (non-traded REIT) is illiquid, complex, and risky. It merged with Moody National REIT I in 2017. Moody National REIT II has a portfolio of securities and over a dozen hotels, including properties with premier brands such as Marriott, Hyatt, Hilton, and others. During the third quarter of 2019, the non-traded REIT had a $447.4M investment portfolio.
Unfortunately, Moody National REIT II was largely affected by the COVID-19 pandemic and experienced a considerable drop in share price. Originally offered at $25/share, in November 2021, secondary market Central Trade & Transfer reported that the non-traded REIT’s shares were listed for just $8/share. However, its stock price may be much lower at this point.
Our non-traded REIT attorneys speak with Moody National REIT II investors who have suffered significant losses. Unfortunately, many of them were unsuitably sold this product and were never fully apprised of the risks. Contact Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) today.Moody National REIT II: Key Events
Some of the key events involving Moody National REIT II over the last two years since COVID-19 include:
- March 2020: Citing a decreased demand across the hotel sector in the wake of the pandemic, the REIT’s Board temporarily suspended the company’s public offering and distribution payments.
- April 2020: Moody National REIT’s share repurchase program and distribution reinvestment plan were suspended effective April 6, 2020.
- May 2020: Mackenzie Realty Capital announced a tender offer to purchase this non-traded REIT for $5/share. Moody National REIT II’s revenue was $39.4M. This was down significantly from its revenue of almost $84.7M in 2019.
- April 2021: Investors’ account statements showed a N/A listing. The non-traded REIT could have been worth less than 50 cents for every dollar. This would have been a massive loss for many shareholders, especially if they didn’t have the portfolios or risk tolerance levels to withstand this type of financial hit.
- August 2021: The company’s Board announced that it was postponing the valuation of Moody National REIT II shares. The non-traded REIT’s net asset value (NAV) has not been updated since December 2019 (when the NAV/share was $23.50).
This investment product should not have been marketed and sold to most retail investors, including inexperienced investors and the majority of retirees. This non-traded REIT began as a blind pool, which means that early investors had no way to assess future investment performances before buying in. It was a risky purchase from the start.
Also, broker-dealers and their financial advisors earned high commissions and dealer management fees of up to 10% from selling Moody National REIT II to customers. Add that to other costs incurred, and this means that less than 87% of investors’ funds went toward the non-traded REIT.What Should You Do if You Suffered Losses in This Non-Traded REIT?
Unfortunately, there are brokerage firms and their registered representatives that, despite knowing better, not only unsuitably sold Moody National REIT II to investors but also misrepresented the risks.
Many brokers omitted to disclose how much of customers’ money was going toward fees or overconcentrated certain customers’ accounts with this investment. As an investor who has suffered losses in this non-traded REIT, you may be able to pursue damages from the firm.
This is not the type of claim for financial recovery that you want to pursue without seasoned legal help. You will want to file your case requesting damages through FINRA arbitration.
Our seasoned Moody National REIT II lawyers have the experience, skills, and resources to go after the largest broker-dealers on Wall Street. Over the years, we’ve recovered millions of dollars on behalf of thousands of our clients through FINRA arbitration, litigation, and mediation.