Posts tagged ‘Behringer Harvard lawsuit’

Non-traded REITs suffer further devaluations.

Several large non-traded REITs recently announced further devaluations.  For example, Inland American REIT recently announced that its valuation was decreasing to $6.93 per share (down from its latest valuation of $7.22 per share, and even lower from its original value of $10 per share).

Behringer Harvard REIT I also announced a drop in estimated value to $4.01 per share from $4.64 per share and Hines REIT announced its share value had dropped to $7.61 from $7.78 per share.

Although one large non-traded REIT, KBS REIT, announced its shares had risen nominally from $5.16 per share to $5.18 per share, overall the news for non-traded REIT investors represented more disappointment in these underperforming investments.

Further compounding the problem with these devaluations is that the shares are illiquid and it is unlikely that the secondary market is paying anywhere near the announced estimated values.  Due to the illiquid nature of non-traded REITs, the buy side of the secondary market is usually inhabited by enterprising and sophisticated venture capital firms and hedge funds.  These entities know that the sellers of non-traded REITs are often desperate for liquidity so the offerss  are often for significantly less than the book value of the underlying assets.  With any real estate investment, though, the “true value” is whatever someone is willing to pay so it is likely that secondary market value of these non-traded REITs is currently less than the recently announced “estimated value.”

The good news is that investors may be able to recover their losses in these underperforming non-trading REITs.

The White Law Group continues to file FINRA arbitration claims involving non-traded REITs, like Inland American REIT, Behringer Harvard REIT I, Hines REIT, KBS REIT and others.  These cases are generally brought against the brokerage firms and financial professionals that recommended the investments

Financial advisors and broker-dealers have a duty to their clients to perform the necessary due diligence on an investment before offering it for sale to their clients and to ensure that any investment recommendation that is made is suitable in light of the client’s age, investment experience, net worth, and investment objectives.   Unfortunately for investors in non-traded REITs, brokerage firms often down play the risk of these products to their clients and sell the investments as safe, income producing investments.

The claims filed by The White Law Group involving these REITs generally allege that the brokerage firms that sold these products failed to perform adequate due diligence on the investments (as they are required to do by FINRA rules, that the investments were unsuitable for the investors in light of their particular financial situation, and that the firms only sold the investments because of the large commissions that non-traded REITs pay to brokerage firms and brokers to sell these products.

If you invested in non-traded REIT and are interested in your litigation options, please call the securities attorneys of The White Law Group at 312/238-9650 for a free consultation.

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Boca Raton, Florida.

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

Recovery of Behringer Harvard Losses

Have you received lowball offers for your Behringer Harvard Short-Term Opporunity Fund I or Berhinger Harvard REIT I investment?  Are you concerned about losses you may have incurred in these products?  If so, The White Law Group may be able to help.

According to statements on the website of Behringer Harvard Holdings LLC, unsolicited lowball offers for less than 5% of the shares outstanding were made last month for two Behringer Harvard deals, the Behringer Harvard Short-Term Opportunity Fund I, a limited partnership, and the Behringer Harvard REIT I Inc., a nontraded real estate investment trust.

Although these offers are likely below the current market value of these two funds, it does accentuate the problem with these investments – the limited market for their sale.  Unlike a traded REIT or mutual fund, non-traded REITs or real estate investments like Behringer Harvard are not traded on an exchange.  For those investors seeking to sell their investments, the secondary market (which is filled with vultures looking for bargain basement prices) is often the only option for selling these investments.

Fortunately, there is another option for investors seeking to recover losses they may have sustained – FINRA arbitration.

The White Law Group is currently representing many Behringer Harvard investors in FINRA arbitration claims against the broker-dealer that initially recommended the investments.  FINRA arbitration is an opportunity to hold the financial professionals that recommended these investments responsible for their recommendation.  Brokerage firms and financial professionals have a fiduciary duty to research an investment prior to recommending it for sale to make sure it is appropriate.  They also have an obligation to make sure the investment is appropriate in light of the investor’s age, investment experience, net worth, and investment objectives.

It is now apparent that many firms misrepresented the risks and liquidity of Behringer Harvard and many unsophisticated investors bought these investments largely based on the income that was promised.  It is also now clear that firms sold Behringer Harvard because of the large commission that the investment paid to the firms for selling the product.

If you are an investor in Behringer Harvard Short-Term Opportunity Fund or Behringer Harvard REIT, you may have a claim to recover your losses or to be put back to where you were before you bought the investment (this is typically called a claim for rescission).

For a free consultation, please call a securities attorney with The White Law Group at 312/238-9650.

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 Boca Raton, Florida.

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

Reports of “Tough Times” for Non-traded REIT Sponsor Behringer Harvard

The White Law Group has been following the nontraded REIT market, including Behringer Harvard REITs, very closely over the last few years. The firm has written about the industry, issues related to how nontraded REITs have been sold and represented by broker-dealers, and increased securities regulator interest in the investment vehicle on our securities fraud and investor protection blog. Further, The White Law Group has represented numerous investors in Financial Industry Regulatory Authority (FINRA) arbitration proceedings seeking to recover damages due to the purchase of non-traded REITs like the Behringer Harvard REIT I, Behringer Harvard Opportunity REIT I and the Behringer Harvard Multifamily REIT I.

Recently investmentnews.com published an article that indicated that Behringer Harvard Holdings Inc. is amidst “tough times.” It was reported that Behringer Harvard “has seen the valuation of its REITs and funds slide, and recently lost two key executives who successfully marketed Beh-ringer Harvard’s REITs to independent broker-dealers.” In addition to these issues, several broker-dealers that had sold Behringer Harvard products “…pulled the plug on their relationship…”

Investmentnews.com mentioned American Portfolios Financial Services Inc. and Securities America Inc. as two of the firms. American Portfolios Financial Services reportedly stopped selling the Behringer Harvard Multifamily REIT I last spring “because of concerns related to how the REIT was paying for its dividend.” A Securities America representative was quoted saying that they stopped the selling the company’s products in 2010 “as a result of [their] ongoing due diligence.”

Tony Chereso, of FactRight LLC, a due diligence firm that has looked into the nontraded REIT industry, was quoted by investmentnews.com saying “Broker-dealers don’t have confidence in Behringer Harvard.” He further said that that opinion also coincided with his firm’s opinion, “We’ve had a similar perspective and cautioned some of the broker-dealers we work [with] to look at the selling agreements…” A Behringer Harvard representative stated that they are not aware of any evidence to support the assessment of Mr. Chereso.

As we have reported previously, the estimated value of the Behringer Harvard Opportunity Reit  I recently fell to $4.12 and joins another Behringer Harvard product, Behringer Harvard REIT I with a valuation under $5 (http://www.whitesecuritieslaw.com/2012/01/13/potential-for-recovery-of-behringer-harvard-opportunity-reit-i-investment-losses/). These declines of more than 50% from the par values are likely disappointing and disconcerting for many investors.

Nontraded REITs are a legitimate alternative investment for many investors, but they may not be right for everyone. Issues with liquidity have been particularly difficult for some investors and it seems, for many of those investors, the liquidity of the investments were not adequately described by their financial professional. Additionally, non-traded REITs have commonly been sold as safe investments, but they are, in fact, a risky investment reliant on the real estate industry.

Brokerage firms have a fiduciary duty to perform due diligence on any investment and to insure that an investment is appropriate in light of the investor’s age, investment experience, and investment objectives. If a broker fails in this responsibility, investors may have an actionable claim to recover their investment losses in a claim through FINRA dispute resolution.

If you are concerned about your investment in a Behringer Harvard nontraded REIT like the Behringer Harvard REIT I, Behringer Harvard Opportunity REIT I, or the Behringer Harvard Multifamily REIT I and would like to speak to a securities attorney about your potential ability to recover losses through FINRA arbitration please call our Chicago office at 312-238-9650.

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 Boca Raton, Florida.

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

Recovery of Behringer Harvard REIT Investment Losses

Have you suffered investment losses in the Behringer Harvard REIT? The White Law Group may be able to help.

The White Law Group is investigating potential securities fraud claims on behalf of investors involving broker-dealers recommendation that investors purchase risky REIT investments, including Behringer Harvard.

FINRA recently announced that it is paying close attention to the sale of REITs and, in particular, the ways in which broker/dealers marketed and sold the products to investors. In many cases, and notwithstanding the risk of REIT investments, broker-dealers marketed these investments as safe and secure.

REITs typically pay a high commission – often as much as 15% (which often explains the stockbroker’s motivation in recommending the REIT investment to the investor).

The White Law Group’s investigation into the improper sales of REITs to investors includes, but is not limited to, recommendations to invest in the following REITs: Behringer Harvard REIT I, Inland America Real Estate Trust, Inland Western Retail Real Estate Trust, Wells Real Estate Investment Trust II, Piedmont Office Realty Trust, Desert Capital REIT, Apple REIT, and Crystal River REIT.

To determine whether you may be able to recover investment losses incurred as a result of your purchase of a risky REIT investment, please contact The White Law Group at 312-238-9650.

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 Boca Raton, Florida.  The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions.

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