According to a new Investment News report, Real Estate Investment Trusts (REITs) are losing steam recently amid fresh concerns of a December interest rate hike.
How would a rate hike impact REITs? According to Yahoo Finance (Why Do REITs Fear Rising Interest Rates), interest rates are inversely related to the REIT sector. This is because a rise in interest rates has a twofold impact on REITs.
First, it leads to a rise in borrowing costs, which impacts their profitability and ability to make acquisitions.
Second, a rise in interest rates makes REITs less attractive investments because REITs have been viewed as dividend-yielding investments.
The good news is that investors may be able to recover their losses in these underperforming non-trading REITs.
The White Law Group continues to file FINRA arbitration claims involving numerous non-traded REITs – like Inland American REIT, Behringer Harvard REIT I, Hines REIT, KBS REIT and others. These cases are generally brought against the brokerage firms and financial professionals that recommended the investments.
For more information see FINRA Awards suggest REITs remain problem in securities industry.
Financial advisors and broker-dealers 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 investors in non-traded REITs, brokerage firms often down play the risk of these products to their clients and sell the investments as safe, income producing investments.
The claims filed by The White Law Group involving these REITs generally allege that the brokerage firms that sold these products failed to perform adequate due diligence on the investments (as they are required to do by FINRA rules, that the investments were unsuitable for the investors in light of their particular financial situation, and that the firms only sold the investments because of the large commissions that non-traded REITs pay to brokerage firms and brokers to sell these products.
If you invested in non-traded REIT and are interested in your litigation options, please call the securities attorneys of The White Law Group at (888) 637-5510 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 Vero Beach, Florida.
For more information on The White Law Group, visit https://www.whitesecuritieslaw.com.