August 2, 2017 Comments (0) Blog, Current Investigations, Securities Fraud

Update on ARC New York City REIT

ARC New York City REIT
(Last Updated On: August 4, 2017)

ARC New York City REIT Stockholder Meeting Adjourns for a Third Time

Concerned about investment losses in ARC New York City REIT? The securities attorneys at The White Law Group may be able to help you recover your losses through the FINRA Arbitration process.

American Realty Capital New York City REIT is a non-traded real estate investment trust sponsored by AR Global and focused on properties located in the five boroughs of New York City, with a focus on Manhattan. The company closed its initial public offering in May 2015 and had raised a total of $764 million in investor equity, as of March 31, 2016. The company owns six properties valued at $785 million.

ARC New York City REIT held its annual meeting of stockholders Wednesday and elected all four director nominees and ratified the appointment of KPMG as the REIT’s independent registered accounting firm. The meeting was adjourned to solicit additional votes on proposed charter amendments and will be reconvened on September 7, 2017, according to a filing with the Securities and Exchange Commission.

The meeting was initially scheduled for June 27th, and reconvened on July 19th, and again on August 2nd.

Shareholders will vote on whether to remove the charter provision that prevents the REIT from retaining any advisor for longer than one year. Affiliated AR Global REITs have sought 20-year management agreements with its external advisor which is controlled by Nicholas Schorsch.

According to SEC filings, the REIT is also seeking to remove the charter provision that imposes a fiduciary responsibility on the advisor and duty to the company and to the stockholders.

The REIT is attempting to prevent the advisory agreement from being terminated on 60 days’ written notice, limiting access to the books and records of the company, allowing the board to privately sell shares in the company, eliminating the ability of 10 percent of shareholders to call a special meeting and giving the board authority to increase this threshold by 5x, and eliminating the current shareholder majority voting requirement before the board can take specified actions.

 

Are Non-Traded REITs a safe bet?

Compared to traditional investments, such as stocks, bonds and mutual funds, non-traded REITS, are considerably more complex and involve a high degree of risk. Unfortunately many investors were not made adequately aware of the risks and liquidity problems associated with REITs.

In October 2016, the company’s board approved an estimated net asset value of $21.25 per share. The initial offering price in 2013 was $25.00.

Unfortunately for investors, Central Trade & Transfer, a secondary market for private placements, was listing shares of ARC New York City REIT In July for  just $14.00 per share. That is significantly less than the original purchase price of $25.00 per share.

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. Recommendations should be in line with the investor’s age, risk tolerance, net worth, and investment experience.

Broker dealers that fail to adequately disclose risks or make unsuitable investment recommendations can be held liable for investment losses.

Free Consultation

The White Law Group has represented numerous investors in claims against the brokerage firm that recommended non-traded REITs such as ARC New York City REIT to its investors.

If you have lost money in ARC New York City REIT at the recommendation of your broker and would like to speak to a securities attorney about the potential to recover your investment losses, please call The White Law Group at 1-888-637-5510 for a free consultation.

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.