According to a recent article on the investmentnews.com website some independent broker-dealers are permitting their representatives to sell fewer non-traded REIT investments in an attempt to lessen their risk.
The news that some broker-dealers are offering fewer non-traded REITs comes at a time when non-traded REITs sales are high, $4.6 billion as of June 30th according to the article. If that sales pace were to continue throughout the year, the sales would top last year’s total which the investmentnews.com stated was “the third highest ever.”
According to the article, some independent broker-dealers’ concerns with the investments center on “the REITs’ expenses and how the REITs pay for their dividend, or “distribution,” as it is known in the industry.” The Financial Industry Regulatory Authority (FINRA) has recently expressed that they are carefully monitoring non-traded REITs and their sale.
The investmentnews.com spoke with National Planning Holdings Inc. and Next Financial Group Inc., both of whom have reduced the amount of non-traded REITs they are offering through their representatives this year. They both indicated that they are not concerned about non-traded REITs in general and did not intend to necessarily reduce the number of non-traded REITs on offer, but through due diligence the numbers were reduced. Barry Knight of Next Financial was quoted as saying, “We look at every offering with the same screens, but approval standards have increased on all products as a result of what’s gone on in the marketplace, and the result of increased potential risk out there for clients and firms.”
The White Law Group continues to carefully monitor the sale of non-traded REITs and how their sale impacts individual investors.
If you are concerned about an investment you made in a non-traded REIT or another investment vehicle and would like to speak to a securities attorney, feel free to 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 https://www.whitesecuritieslaw.com