Recovery of Investment Losses in Healthcare Trust Inc.
Are you concerned about your investment losses in Healthcare Trust Inc.? If so, The White Law Group may be able to help by filing a FINRA arbitration claim against the brokerage firm that sold you the investment.
Healthcare Trust Inc. is a publicly registered non-traded real estate investment trust sponsored by AR Global (the successor business to AR Capital). The company invests in multi-tenant medical office buildings and owns an 8.4 million-square-foot portfolio of 163 properties with a total purchase price of $2.3 billion. The company’s primary offering went effective in February 2013 and closed in November 2014 after raising $2.2 billion in investor equity.
Healthcare Trust Inc. Lowers NAV
The board of Healthcare Trust Inc. approved an estimated net asset value of $21.45 per share, as of December 31, 2016.
The company’s previous NAV was $22.27 per share, as of December 31, 2015. In a filing with the Securities and Exchange Commission, the company said that the decline was due to selling three properties in 2016 and a higher share count. The company noted that the total value of the current portfolio increased by $11.5 million from December 31, 2015 to December 31, 2016.
Duff & Phelps, an independent third-party real estate advisory firm, assisted with the valuation and provided a range of $19.44 – $21.45 per share. The midpoint in the range was $20.41.
The NAV per share is based on the estimated fair value of the company’s assets less the estimated fair value of the its liabilities, divided by the number of shares outstanding on a fully diluted basis.
The White Law Group continues to investigate claims on behalf of investors that purchased investments such as Healthcare Trust Inc. and other non-traded REITs. Specifically, the firm is investigating the liability that brokerage firms may have for improperly selling these high-risk, illiquid investments.
The Problem with Non-traded REITs
One of the major downfalls of REITs is the lack of liquidity. Non-traded REITs are not sold on the public market, therefore they lack liquidity. This prevents shares from being sold quickly and forces investors to search for a secondary market that is often very limited. The secondary market price is almost always significantly below the purchase price.
Many brokerage firms target investors that were retired or near retirement, often emphasizing the potential income the REIT may provide.
Unfortunately, some brokerage firms failed to disclose that it is not uncommon for REITs to borrow money in order to make distributions. In addition, distributions are often merely a return of principle. REITs are complex high risk products that are not suitable for most investors.
Brokerage firms have a fiduciary duty to its clients to perform adequate due diligence on an investment prior to recommending it for sale. They must ensure that any investment recommended is appropriate in light of the investor’s age, investment experience, net worth, and investment objectives. Given what is now known about non-traded REITs, it is clear that certain of the brokerage firms that sold this investment failed in its fiduciary duty to its clients.
If you suffered losses as a result of your purchase of Healthcare Trust Inc. or another AR Global offering 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 firm, please visit https://www.whitesecuritieslaw.com.