Potential Claims Involving Hospitality Investors Trust Inc.
Did you lose money investing in Hospitality Investors Trust Inc. at the recommendation of your broker? If so, The White Law Group may be able to help you recover your losses by filing a FINRA Arbitration claim against the brokerage firm that employs him.
American Realty Capital Hospitality Trust Inc., a publicly registered non-traded real estate investment trust, changed its name to Hospitality Investors Trust Inc. following its transition to a standalone self-managed REIT.
Hospitality Investors Trust Inc.., is a non-traded real estate investment trust that acquires and owns hotels in the United States. The company primarily operates its hotels under a franchise or license agreement with various brands. According to Bloomberg, as of December 31, 2015, it owned and had interests in 136 hotels with a total of 16,644 guest rooms in 32 states. The company was founded in 2013 and is based in New York, New York.
According to Central Trade & Transfer, a secondary market website, shares of Hospitality Investors Trust Inc. are currently listed for just $11.01 per share. Unfortunately for many investors, it appears that the secondary market price would represent a significant loss on their initial capital investment, as the original offering price was $25.00 per share.
Risks of Non-traded REITs
The White Law Group is investigating potential securities fraud claims involving broker-dealers’ improper recommendations. Investors who purchase high-risk non-traded REIT investments, like Hospitality Investors Trust Inc., may not be aware of the problems and risks involved.
Real estate investment trusts (REITs) are complex and inherently risky products. Compared to traditional investments, such as stocks, bonds and mutual funds, REITs are significantly more complex and often better suited for sophisticated and institutional investors.
Another problem often associated with REIT recommendations is the high sales commissions brokers typically earn for selling REITs – as high as 15%.
Brokers have an obligation to make investment recommendations that are consistent with their clients risk tolerance, net worth, investment objectives and experience in the market. Unfortunately, in many cases, the high sales commission may provide some brokers with enough incentive to make unsuitable investment recommendations.
In addition to the high risks, non-traded REITs, like Hospitality Investors Trust Inc. often lack liquidity. Investors looking to sell these investments often have difficulty finding a buyer, and if they are able to find one can suffer significant losses on the sale.
Broker dealers are required to perform adequate due diligence on any investment they recommend and to ensure that all recommendations are suitable for the investor. Firms that fail to do so, may be held responsible for any losses in a FINRA arbitration claim.
If you suffered losses investing in Hospitality Investors Trust, Inc. and would like a free consultation with a securities attorney, please call The White Law Group at 888-637-5510.
The White Law Group is a national securities arbitration, securities fraud, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.
For more information on The White Law Group, visit www.whitesecuritieslaw.com.