Securities Investigation involving ARC Healthcare Trust III
The White Law Group continues to investigate potential claims involving broker-dealers who recommended risky non-trade REITs such as ARC Healthcare Trust III to investors.
American Realty Capital Healthcare Trust III is a publicly registered non-traded real estate investment trust sponsored by AR Global. The REIT raised $168 million prior to the cancellation of its offering. As we previously told you, ARC Healthcare Trust III suspended its distribution reinvestment plan in May.
Shareholders will vote on Liquidation
According to reports on Tuesday, American Realty Capital Healthcare Trust III shareholders will soon vote on a proposal to sell substantially all of the company’s assets to affiliated Healthcare Trust Inc. for $120 million.
The board has approved a plan of liquidation and dissolution of the REIT as well as the proposed purchase by Healthcare Trust Inc. Shareholders must approve both proposals for either to become effective.
The annual meeting of shareholders is scheduled on December 21, 2017 at 4:00 p.m. local time at The Core Club in New York City. The vote will take place at the meeting.
According to ARC Healthcare Trust III, shareholders will receive $17.67 to $17.81 per share of common stock. The REIT anticipates paying periodic liquidating distributions, including an initial liquidating distribution of $15.75 per share that is expected to be paid within two weeks of closing the asset sale. Shares were originally sold for $25.00 each.
Healthcare Trust Inc.’s primary offering went effective in February 2013 and closed in November 2014 after raising $2.2 billion in investor equity.
Are Non-traded REITs Suitable for you?
Many brokerage firms target investors that were retired or near retirement, often emphasizing the potential income that a 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.
Another problem with 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.
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.
Have you suffered losses investing in ARC Healthcare Trust III or another AR Global offering? If so, please call the securities attorneys of The White Law Group at 888-637-5510 for a free consultation. You may be able to recover your losses through FINRA arbitration.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee.
For more information on the The White Law Group, please visit https://www.whitesecuritieslaw.com.