August 4, 2016 Comments (0) Blog, Current Investigations

Latest News on Northstar Real Estate Income II

(Last Updated On: November 16, 2016)

Have you suffered investment losses in NorthStar Real Estate Income II REIT? If so, The White Law Group may be able to help you recover your losses through FINRA arbitration.

On August 3, 2016, NorthStar Real Estate Income II, Inc. (NorthStar Income II), through its operating partnership, entered into a purchase and sale agreement with an affiliated company, NorthStar Realty Finance Limited Partnership.  Under the purchase and sale agreement, NorthStar Income II will acquire 100% of the membership interest of  PE Investments-T CAM2, LLC, which owns equity interests and limited partnership interests in 1 real estate private equity funds, managed by 20 different sponsors, with a reported net asset value of approximately $344.3 million, as of March 31, 2016.

NorthStar Income II will purchase the interests for $273.1 million, and assume $44.4 million in deferred purchase price obligations to third parties as part of the purchase and sale agreement.  The purchase and sale agreement is anticipated to close on September 15, 2016.

The White Law Group is investigating potential securities fraud claims involving broker-dealers’ improper recommendation that investors purchase high-risk non-traded REIT investments, like NorthStar Real Estate Income II. Many investors are not fully aware of the problems and risks associated with these investments before purchasing them.

Real estate investment trusts (REITs) are complex and inherently risky products. Compared to traditional investments, such as stocks, bonds and mutual funds, REITs are significantly more complex and often better suited for sophisticated and institutional investors.

Another problem often associated with REIT recommendations is the high sales commissions brokers typically earn for selling REITs – as high as 15%. Brokers have an obligation to make investment recommendations that are consistent with their clients risk tolerance, net worth, investment objectives and experience in the market. Unfortunately, in many cases, the high sales commission may provide some brokers with enough incentive to make unsuitable investment recommendations.

In addition to the high risks, non-traded REITs, like NorthStar Real Estate Income II often lack liquidity. Investors looking to sell these investments often have difficulty finding a buyer, and if they are able to find one can suffer significant losses on the sale.

Broker dealers are required to perform adequate due diligence on any investment they recommend and to ensure that all recommendations are suitable for the investor. Firms that fail to do so, may be held responsible for any losses in a FINRA arbitration claim.

For more information on The White Law Group’s investigation in to potential North Star Real Estate Income II claims, click here.

If you suffered losses investing in NorthStar Real Estate Income II and would like a free consultation with a securities attorney, please call The White Law Group at (888) 637-5510.

The White Law Group is a national securities arbitration, securities fraud, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.

For more information on The White Law Group, visit www.whitesecuritieslaw.com.