March 2, 2017 Comments (0) Blog, Current Investigations

American Realty Capital – Retail Centers of America Tender Offer

KBS REIT
(Last Updated On: March 31, 2017)

Have you suffered losses investing in American Realty Capital – Retail Centers of America?

Are you concerned about your losses investing in American Realty Capital – Retail Centers of America? If so, the securities attorneys of The White Law Group may be able to help you recover those losses through a FINRA arbitration claim against the brokerage firm or financial advisor that recommended the investment to you.

The White Law Group has handled a number of claims involving non-traded real estate investment trusts (REITs) like American Realty Capital – Retail Centers of America.

In those claims, the firm has alleged, among other things, that REITs were

(1) high-risk and unsuitable for our clients given their financial needs and investment objectives,

(2) that the risks of the investment were not fully disclosed to them, and

(3) that the brokerage firms that sold the investments failed to follow FINRA rules to perform adequate due diligence.

Update on American Realty Capital – Retail Centers of America

Recently, Coastal Realty Business Trust, an affiliate of MacKenzie Capital Management LP, has completed its recent American Realty Capital – Retail Centers of America tender offer.

The company had offered to acquire up to one million shares of the ARC-Retail at $5.50 per share, but was able to purchase just 7,600 shares.

The ARC-Retail board had unanimously recommended that its shareholders reject the offer, which was $3.50 per share less than the estimated net asset value per share of $9.00.

The tender offer was $4.76 per share less than the estimated merger consideration of $10.26 that shareholders are expected to receive should the proposed merger with American Finance Trust, another non-traded REIT sponsored by AR Global (the successor company to American Realty Capital), be completed.

The proposed merger is the subject of a class action lawsuit filed by ARC-Retail shareholders.

Non-Traded REITs are risky.

The White Law Group continues to investigate potential securities fraud claims involving broker-dealers’ improper recommendation that investors purchase high-risk non-traded REIT investments, like American Realty Capital – Retail Centers of America . 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 American Realty Capital – Retail Centers of America 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.

Free Consultation

If you suffered losses investing in American Realty Capital – Retail Centers of America 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.