January 26, 2018 Comments (0) Blog, Current Investigations

Investor Alert: Hospitality Investors Trust Inc. – Investigation

Hospitality Investors Trust
(Last Updated On: January 26, 2018)

Hospitality Investors Trust Inc.  – $10.00/share

The White Law Group continues to investigate potential claims involving broker dealers who may have unsuitably recommended Hospitality Investors Trust Inc. to investors.

Hospitality Investors Trust is publicly registered non-traded real estate investment trust. The REIT recently changed its name from ARC Hospitality Trust.

As of the first quarter of 2017, the company’s $2.4 billion portfolio was comprised of 141 properties. The REIT’s offering went effective in January 2014 and suspended sales activities in November 2015 after raising $911 million in investor equity, according to reports.

Hospitality Investors Trust Inc. is not currently offering a redemption plan to shareholders and it suspended distributions in January 2017.

Non-traded REITs like Hospitality Investors Trust Inc. often lack liquidity. Investors looking to sell these investments often have difficulty finding a buyer, and if they are able to find one may suffer significant losses on the sale.

According to Central Trade & Transfer, a secondary market for private placements, shares of Hospitality Investors Trust Inc. are currently listed for just $10.50/share. It appears that the secondary market price would represent a significant loss on their initial capital investment, since the original offering price was $25.00/share.

Risks of Non-traded 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. They are often better suited for sophisticated and institutional investors.

Brokers have an obligation to make investment recommendations that are suitable for their clients. They must consider their 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. Brokers earn as much as 15% commission for selling REITs.

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 with a Securities Attorney

Did you lose money investing in Hospitality Investors Trust Inc. at the recommendation of your broker? If so, The White Law Group may be able to help you recover your losses by filing a FINRA Arbitration claim against the brokerage firm that sold you the investment.

For 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.

 

 

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