Given the sheer volume of negative news currently in the press regarding David Lerner & Associates and Apple REIT, it will not be surprising if many Apple REIT investors attempt to redeem their investments today (Apple REIT permits redemption requests quarterly). Unfortunately, due to these same forces (FINRA’s ongoing investigation, the class action filed against David Lerner and Apple REIT, the news about the declining value of the REITs), it would also not be a surprise if Apple REIT were unable to fulfill all of the redemption requests and/or suspended redemptions all together.
For retired investors (or investors on a fixed budget), this result could be devastating and is exactly why non-traded REITs like Apple REIT are often unsuitable for income needing, conservative investors.
Unfortunately, as FINRA’s investigation alleges, many of the investors in Apple REIT are unsophisticated and elderly investors that were unaware of the liquidity concerns of owning a non-traded REIT investment. The other problem, which has been discussed in prior blog entries on this same site, is that the true value of Apple REIT is not what is represented on investors’ David Lerner account statements. Notwithstanding the fact that David Lerner continues to maintain that Apple REIT shares are worth the $11/share that investors paid for the invest, Apple REIT has acknowledged that the book value of the REITs has declined to less than $8/share and the current offer in the secondary market for the REITs is $3/share.
Based on the foregoing, David Lerner investors are right to be worried about their Apple REIT investments. If you are concerned about your Apple REIT investment and would like to speak with a securities attorney about your options, The White Law Group may be able to help.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida. The firm handles FINRA arbitration cases throughout the country.
For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.