May 1, 2018 Comments (0) Blog, Current Investigations

Carter Validus Mission Critical REIT Suspends SRP

Carter Validus Mission Critical REIT

Recovery of Investment Losses in Carter Validus Mission Critical REIT

Did you lose money investing in Carter Validus Mission Critical REIT at the recommendation of your financial advisor? If so, the securities attorneys at The White Law Group may be able to help you to recover your losses.

Carter Validus Mission Critical REIT is a non-traded REIT that invests in net leased data center and healthcare assets. The company’s offering, declared effective in December 2010, closed in June 2014 after raising more than $1.7 billion in investor equity.

According to recent SEC filings, the board of Carter Validus Mission Critical REIT has suspended the company’s share repurchase program (SRP) for the rest of the year.

The REIT said that it has already reached its 5 percent share repurchase limit and will not be able to fully process all repurchase requests for the month of April 2018.

The suspension will go into effect for the May 2018 repurchase period and will continue until the board resumes the program at a yet-to-be determined time.

For April repurchase requests, shares will be repurchased pro rata as follows: first, repurchases upon the death of a stockholder; next, repurchases to stockholders who demonstrate, in the discretion of the board, another involuntary exigent circumstance such as bankruptcy; third, repurchases to stockholders subject to a mandatory distribution requirement under an IRA; and finally, all other repurchase requests, according to filings with the SEC.

The Problem with Non-traded REITs

The White Law Group continues to investigate potential claims involving broker-dealers’ unsuitable recommendation that investors purchase high-risk non-traded REIT investments, like Carter Validus Mission Critical REIT. Many investors are not fully aware of the problems and risks associated with these investments before purchasing them.

Non-traded Real estate investment trusts (REITs) are complex and risky. 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 Carter Validus Mission Critical REIT 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.

If you are concerned about your investment in Carter Validus Mission Critical 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.