April 4, 2017 Comments (0) Current Investigations

Hines REIT Pays Final Liquidating Distribution

Hines REIT
(Last Updated On: April 4, 2017)

Recovery of Investment losses in Hines REIT

Have you suffered investment losses in Hines REIT? If so, The White Law Group may be able to help you recover your losses by filing a FINRA Dispute Resolution claim against the brokerage firm that sold you the investment.

Hines REIT, a publicly registered non-traded REIT, invests in commercial real estate with a focus on multifamily properties. The REIT went effective in June 2004 and raised $2.3 billion in investor equity prior to closing its offering. In total, the company has acquired interests in 66 properties since its inception and has sold its interests in 42 of those properties, as of June 30, 2016.

The White Law Group continues to investigate potential securities fraud claims on behalf of investors involving broker-dealers recommendation that investors purchase risky REIT investments, including Hines REIT.

Hines REIT Liquidation

In early July, the Hines REIT board of directors unanimously approved a plan of liquidation.

Hines REIT previously distributed $1.01 per share from July 2011 through April 2013 which was designated as partial return of invested capital. Shares were originally priced between $10.00 and $10.40 each, with a final offering price of $10.08.

Hines previously announced that it will stop paying regular quarterly distributions after the second quarter of 2016 and expected to make final distributions to its stockholders on or before December 31, 2016.

As of April 17, 2017, Hines REIT declared a $0.30 per share liquidating distribution to all stockholders. The distribution, which totals approximately $73.1 million, is expected to be paid in cash on or around April 18, 2017.

Hines REIT established a reserve account of approximately $0.05 per share to pay on-going expenses of the liquidation, including litigation expenses associated with a case pending in the Circuit Court of Baltimore City. The REIT expects this to be the final liquidating distribution, but plans to distribute any unused funds from the reserve account if they exist.

The company also extended its advisory agreement with Hines Advisors LP and its operating partnership, Hines REIT Properties LP, for an additional year through March 31, 2018.

The Risks of REITs

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 Hines Global REIT 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.

Free Consultation

To determine whether you may be able to recover investment losses incurred as a result of your purchase of a risky REIT investment like the Hines Real Estate Investment Trust (REIT) please contact The White Law Group at 888-637-5510.

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 Vero Beach, Florida.

For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.