Posts tagged ‘KBS REIT valuation’

More Bad News for KBS REIT

Last month, a group of investors filed a prospective class action complaint against KBS Real Estate Investment Trust Inc. (or KBS REIT I) in the U.S. District Court for the Middle District of Florida in Fort Myers.  The class action alleges that KBS made misrepresentations about the REIT, including its investment objectives, the dividend payment policy, and the value of the REIT’s investments.

It is being reported that this suit has caused at least one brokerage firm, Summit Brokerage Services, to suspend its selling agreements with sponsor KBS Holdings LLC.  This news also raises questions regarding the ability of KBS REIT to succeed moving forward.  In March, KBS REIT I announced a new valuation of $5.16 a share, down from $7.32 a share, and from the $10/share that original investors paid for the shares. KBS REIT has also cut its distribution to zero.

The White Law Group continues to file FINRA arbitration claims against the brokerage firms that recommended KBS REIT.  These claims generally allege that the broker-dealers that sold KBS failed to perform the adequate due diligence on KBS REIT before offering it for sale to their clients.

Brokerage firms have a fiduciary duty to perform adequate due diligence on any investment before offering it for sale to its clients.  Based on what is now known about KBS, it does not appear that the firms that sold KBS REIT performed the necessary due diligence on the offering.

Certainly, the extremely high commission offered by KBS REIT to brokerage firms for selling the product may explain the brokerage firms’ motivation in approving an investment with so many issues.

If you are a KBS REIT investor and you would like to discuss your litigation options with a REIT fraud attorney, please call 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.

KBS REIT I Valuation Drops Again and Signals More Trouble for Investors

Investors in the popular non-traded REIT, KBS Real Estate Trust Inc. (KBS REIT I), were reportedly notified on Monday that the value of their shares is now estimated by the company at $5.16. The new valuation represents a 29% drop from the last change to the valuation in late 2009 and a nearly 50% drop since shares of KBS REIT I were initially offered at $10.00. Additionally, KBS investors were told that they would no longer be receiving any distributions. KBS REIT I is just the latest major non-traded REIT to see a drop in its valuation in recent months as many of these investments have struggled with a difficult real estate market over the last couple of years.

This most recent valuation will likely be troubling to many investors in the KBS non-traded REIT. If you invested in KBS REIT I and are wondering if you may have recourse to recover your investment, The White Law Group may be able to assist you in pursuing recovery of your nontraded REIT damages through FINRA arbitration process. The Financial Industry Regulatory Authority (FINRA) continues to pay close attention to issues related to non-traded REITs, including how they are sold and valuated.

The White Law Group has represented many investors who have struggled with non-traded REIT investments, including KBS Real Estate Investment Trust, Inc. (KBS REIT I), over the past few years in the FINRA dispute resolution claims.

The firm has seen several issues commonly arise around how non-traded REITS are sold and represented to investors. In many cases the risks associated with nontraded REITs were not adequately represented before purchase and investors have often been over-concentrated in this type of real estate investment. In some cases, the fact that advisors receive relatively high commissions for the sale of nontraded REITs compared to other products may have contributed to some investors being unsuitably invested in non-traded REIT investments. Finally, it seems common that the illiquid nature of non-traded REITs has not been made clear to some investors. Investors in nontraded REITs, like KBS REIT I, that have had redemption programs suspended may have difficulty selling their investments or suffer a serious loss on the secondary market.

Brokerage firms and financial advisers 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 or brokerage firm 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 KBS Real Estate Investment Trust, Inc. (KBS REIT I) or another nontraded REIT investment and would like to speak to a securities attorney about potential to recover your investment losses through FINRA dispute resolution 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 KBS REIT Investment Losses

Have you suffered investment losses in KBS REIT? Are you concerned about KBS REITs current price valuation?  If so, The White Law Group may be able to help you recover your losses through FINRA arbitration.

The White Law Group is investigating potential securities fraud claims involving broker-dealers’ improper recommendation that investors purchase risky non-traded REIT investments, including KBS REIT.

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 KBS REIT, 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.

The White Law Group’s investigation into the improper sales of non-traded 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, 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 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.