According to an Investment News report, Behringer Harvard Holdings LLC, is struggling to make payments on loans in two of its offerings — and is losing real estate assets as a result.
After months of failed negotiations over $48.3 million of debt, the nontraded Behringer Harvard Opportunity REIT I Inc. this month had several properties go into bankruptcy protection. And a private placement, the Behringer Harvard Short-Term Opportunity Fund I LP, this month entered a “deed in lieu of foreclosure agreement” that transferred properties to the lender. The Behringer Harvard fund had owed $20.2 million on those properties.
Behringer Harvard Opportunity REIT I saw its estimated value decline 46% at the end of 2011 to $4.12 a share, from $7.66 a year earlier.
Also as of Dec. 31, investors in the Behringer Harvard Short-Term Opportunity Fund I LP, which had about $130 million in total assets, saw its valuation drop to 40 cents a share, down drastically from $6.48 a share as of Dec. 31, 2010.
This is troublesome information for Behringer Harvard investors and apparently the bad news does not end there.
The two real estate offerings could be facing more trouble. The Opportunity REIT I, with $524.4 million in total assets, is sitting on an additional $68.4 million in debt that is maturing this year.
And the move to shed real estate cuts the total assets of the Short-Term Opportunity Fund I essentially in half. On a pro forma basis and taking into account the recent loss of real estate, the fund had $64.5 million in total assets. That’s compared with $112.5 million in total assets at the end of March, according to a filing with the Securities and Exchange Commission.
The White Law Group continues to file FINRA arbitration claims on behalf of investors against the brokerage firms and financial professionals that recommended these two Behringer Harvard funds to its clients. Based on what is currently known about Behringer Harvard Opportunity REIT and Behringer Harvard Short-Term Opportunity Fund, it is clear that brokerage firms should not have sold these REITs to its clients and only did so because of the enormous commissions these funds paid to the broker dealers.
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