According to Investment News, it appears that Inland American Real Estate Investment Trust may be preparing for a merger or listing on an exchange. Often when a non-traded REIT suspends their redemption program events such as a merger or listing of shares typically follow.
In a letter to shareholders, the REIT announced that they are suspending their current repurchase program, which includes extenuating circumstances such as death, disability, or confinement to a long term health facility. The suspension will go into effect near the end of February 2014.
Non-traded REITs, like Inland American, have been a thorn in the side for many investors. Many have depreciated significantly in value and remain illiquid, which means that investors are unable to find anyone willing to purchase their shares. Often at the time of purchase, investors did not understand the complexity and high degree of risk associated with non-traded REITs. In addition some investors were misled about the potential for returns and were never made aware that the investment was inherently illiquid.
According to Investment News, Inland American shares that were originally purchased for $10.00 per share were evaluated to be worth $6.94 share as of the end of December. However, shares of Inland American were being purchased and sold for as little as $5.98 on the secondary market.
Brokerage firms 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 many investors in non-traded REITs, brokerage firms often downplayed the risk of these products and sold the investments as a safe, income producing investments.
If you invested in Inland American and would like to discuss your litigation options to recover your investment losses, 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 www.White SecuritiesLaw.com.