September 27, 2016 Comments (0) Current Investigations

Investor Alert: Realty Finance Trust, Inc.

(Last Updated On: October 7, 2016)

Have you suffered losses investing in Realty Finance Trust? If so, The White Law Group may be able to help.

 According to Bloomberg, Realty Finance Trust, Inc. is a real estate investment trust (REIT) launched and managed by Realty Financial Advisors Inc. It invests in the real estate markets across United States. The firm seeks to acquire, originate and manage a diversified portfolio of commercial real estate debt investments secured by income-producing properties.

real estate investment trust (REIT) is a company that owns, and in most cases, operates income-producing real estate. REITs own many types of commercial real estate, ranging from office and apartment buildings to warehouses, hospitals, shopping centers, hotels and even timberlands. Some REITs also engage in financing real estate. The REIT structure was designed to provide a real estate investment structure similar to the structure mutual funds provide for investment in stocks.

REITs are complex and high risk investments that are really only suitable for sophisticated investors. It is the duty of the brokerage firm to perform due diligence on any investment and to ensure that the investment is suitable for a particular investor in light of that investor’s age, investment objectives, income, net worth, and investment experience. Given the current risk of devaluation of these REITs, such investments are likely only suitable for wealthy and/or sophisticated investors.

On September 27, 2016, Realty Finance Trust, Inc., (RFT) announced the appointment of Benefit Street Partners, L.L.C. (BSP) as its new external advisor, effective immediately.  RFT had previously solicited a new advisor via a special committee of RFT’s board of directors, and evaluated four proposals from prospective advisors, before selecting BSP.

In conjunction with the appointment, Richard Byrne, president of BSP, has been appointed chairman and chief executive officer of RFT, and Jerry Baglien, chief financial officer of commercial real estate for BSP, has been appointed chief financial officer of RFT.  These appointments follow the resignation of the prior serving executive officers of RFT.  Additionally, the board of directors was expanded to five members, including Jamie Handwerker and Buford Ortale, newly appointed independent directors.

In addition to the appointment of the advisor, a new advisory agreement was approved, with substantially the same terms as the prior advisory agreement.  Changes from the prior advisory agreement include, amongst others, acquisition fees of 1.0% on the first $600 million of investments acquired under the new advisory agreement, and an asset management fee of 1.5% of equity, as defined in the new advisory agreement.

For more information on The White Law Group’s investigation of non-traded REITS see FINRA Awards suggest REITs remain problem in securities industry.

The White Law Group is investigating potential securities fraud claims involving broker-dealers’ improper recommendation that some investors purchase REITs like Realty Finance Trust, Inc. Brokerage firms that sell such products are required to perform adequate due diligence on the investments to ensure a reasonable likelihood of success, and to evaluate whether the investments are suitable in light of the client’s age, net worth, investment experience, and investment objectives.

If you suffered losses investing in Realty Finance Trust 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 firm, visit http://www.whitesecuritieslaw.com.