According to reports, Strategic Realty Trust Inc., formerly the TNP Strategic Realty Trust Inc., recently told investors that the REIT’s valuation had been reduced to $7.11 per share from $10, a decline of 29%. The decrease in the REIT’s estimated value comes after an appraisal and review of its financial statements from Robert A. Stanger & Co. Inc., an investment bank.
According to a letter reportedly sent to shareholders, Strategic Realty Trust, which owns a portfolio of 16 shopping centers, has seen property appreciation of $1.65 per share since its inception. Over the past five years those gains were offset by transactions costs of $1.54 per share, offering and organization costs of $1.23 per share, return of capital to investors through distributions of $1.04 per share, and a per-share loss of 52 cents on a property in Hawaii. It also had per-share losses of 21 cents for other, unnamed reasons and marking debt to market.
The REIT, which began raising money in August 2009, was sold at $10 per share by representatives at independent broker-dealers.
The decline in Strategic Realty Trust’s share value is surprising given that the REIT was started after the 2008 financial crisis and should have benefited from acquiring depreciated assets.
Unfortunately, this is an all too common story for nontraded REIT investors. The cost structure of these investments makes it difficult for the investments to succeed even in the best of investing climates.
The White Law Group continues to investigate the liability that brokerage firms may have for improperly recommending Strategic Realty Trust (formerly TNP Strategic Realty Trust) to its clients.
Brokerage firms are required to perform adequate due diligence on any investment they recommend and to ensure that all recommendations made are suitable for their clients in light of the clients’ age, income, net worth, tax status, investment experience, and investment objectives.
Given what has happened with Strategic Realty Trust since its inception, it appears that some firms may have failed in these duties to their clients.
For more on The White Law Group’s Strategic Realty Trust investigation, please visit http://www.whitesecuritieslaw.com/tag/strategic-realty-trust-losses/.
To discuss your litigation options with a securities attorney, please call The White Law Group at 312/238-9650 for a free consultation.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.
For more information on The White Law Group, visit http://www.whitesecuritieslaw.com.