Posts tagged ‘Dividend Capital Total Realty Trust losses’
New Offering, Redemption Plan Coming for Dividend Capital REIT Investments
Since our last post on Dividend Capital, LLC and the Dividend Capital Total Realty Trust, The White Law Group has heard from a number of investors who have recently received letters from the company regarding the value of their shares. According to those investors, the new price per shares is $6.69 and the quarterly dividend rate is 5.23%. Indeed, a recent filing of with the Securities and Exchange Commission and prospectus for Dividend Capital shares indicate a major restructuring along with new terms for investor repurchase plans. It also appears the Total Realty Trust may now go by a new name – Dividend Capital Diversified Property Fund.
The new offering of Dividend Capital, LLC stock shares is being held as a way for the company to offer liquidity in its non-traded REIT shares. Shares of non-traded REITs generally are highly illiquid but are sold as paying off when the REIT either goes public, liquidates, or is sold to another REIT. According to the company’s SEC Filing, the new Dividend Capital offering is designed to infuse capital to back their fund shares so they no longer have to list a termination date when one of those three events must occur. The new structure comes with a new share repurchase plan – one that purports to allow investors to liquidate their shares at any time for a price determined by a daily calculation of the company’s Net Asset Value (“NAV”). This new plan would take effect October 1, 2012.
The new redemption plan is not without restrictions, however, and it is unlikely that many investors will be able to immediately get all their money out of their Dividend Capital investment. First, Class E Dividend Reinvestment Plan shares are apparently not subject to the new plan and Dividend Capital will only redeem a total of 5% of all outstanding shares in a given year. Second, though an investor may request redemption of any or all of their Class A, W, or I shares at any time, Dividend Capital has instituted a “Quarterly Cap” on redemptions equal to 5% of the total NAV of all shares set on the last day of the previous calendar quarter. As such, depending on the NAV calculation and demand for redemption, investors could remain locked into their Dividend Capital shares for some time. Like all non-traded REIT shares, the Board of Directors reserves the right to change or suspend the redemption plan.
Other non-traded REITs have undertaken similar restructuring methods in attempts to infuse capital into struggling offerings in the past. While it is too early to tell if Dividend Capital is in a comparable predicament, The White Law Group has seen similar efforts by other REITs in attempts to prop up a troubled REIT investment.
The White Law Group’s investigation into the improper sales of non-traded REITs 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, Crystal River REIT, and KBS REIT.
To determine whether you may be able to recover investment losses incurred as a result of your purchase of Dividend Capital Total Realty Trust, 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.
For more information on The White Law Group, visit http://www.whitesecuritieslaw.com.
Recovery of Dividend Capital Total Realty Trust Losses
Have you suffered investment losses Dividend Capital Total Realty Trust? If so, The White Law Group may be able to help you recover your losses through FINRA arbitration.
According to its filings with SEC, Dividend Capital Total Realty Trust Inc. is a Maryland corporation located in Denver, Colorado formed on April 11, 2005 to invest in a diverse portfolio of real property and real estate-related investments. The Company’s targeted investments include direct investments in real properties, consisting of high-quality office, industrial, retail, multi-family, and other properties primarily located in North America, and investments in securities, including securities issued by other real estate companies and mortgage loans secured by income-producing real estate and other securities.
Based on offers on the secondary market, it appears that the value of Dividend Capital Total Realty Trust has declined substantially.
The White Law Group is investigating potential securities fraud claims involving broker-dealers’ improper recommendation that investors purchase risky non-traded REIT investments, including Dividend Capital Total Realty Trust.
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).
Due to the relatively high interest or dividend offered by non-traded REITs like Dividend Capital Total Realty Trust, retired investors are often attracted to these products. Unfortunately, in addition to be risky investments, non-traded REITs are also illiquid (limiting investors’ ability to access their own money for unforeseen expenses).
Another problem with non-traded REITs is that broker-dealers are not required to frequently update the current price of the investment. This often leads investors to believe that there REIT investment is doing well even though the widespread real estate market collapse would indicate otherwise.
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.
For more information on The White Law Group, visit http://www.whitesecuritieslaw.com.