Steadfast Income REIT Tender Offer $7.22/Share
Are you concerned about investment losses in Steadfast Income REIT? If your financial advisor recommended Steadfast Income REIT and you have suffered losses, you may have recourse through a FINRA Arbitration claim.
The White Law Group is investigating potential securities fraud claims involving broker-dealers’ improper recommendation that investors purchase high-risk non-traded REITs, like Steadfast Income REIT. Many investors are not fully aware of the problems and risks associated with these investments before purchasing them.
Steadfast Income REIT is a non-traded Real Estate Investment Trust (REIT) that closed its initial public offering on December 20, 2013.
Tender Offer to Shareholders
On Monday, MacKenzie Realty Capital, Inc. extended a tender offer to shareholders of just $7.22 per Share. The original purchase price was $10.00/share. Although Steadfast’s charter requires its board of directors to consider a plan of liquidation annually, no such plan has been adopted. According to MacKenzie, the company hasn’t given any indication as to when such an event may occur.
Steadfast has an oversubscribed share repurchase program. During the first half of 2017, Steadfast redeemed only 36% or 364,181 shares of the 1,022,901 submitted for redemption. While the repurchase program is capped at $2 million per quarter, MacKenzie is offering to purchase over $7 million.
Non-Traded REITs are Risky
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. They are 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 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 Steadfast Income REIT often lack liquidity. Investors looking to sell these investments often have difficulty finding a buyer. 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. They must 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.
If you are concerned about investment losses in Steadfast Income REIT 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.