Investigating Potential Claims – ARC Healthcare Trust III
The White Law Group is investigating potential claims involving broker dealers who may have unsuitably recommended non-traded REITs such as ARC Healthcare Trust III to investors.
According to SEC filings, on December 21, 2017 at the Annual Meeting, shareholders of American Realty Capital Healthcare Trust III approved liquidation and dissolution of the company. The REIT completed the sale of substantially all of its assets to affiliated non-traded REIT Healthcare Trust Inc. for $120 million.
American Realty Capital Healthcare Trust III is a publicly registered non-traded real estate investment trust sponsored by AR Global.
The board approved an initial liquidating distribution of $15.75 per share of common stock to be paid on January 5, 2018 to stockholders of record at the close of business on December 22, 2017.
ARC Healthcare Trust III estimates that stockholders will receive $17.67 to $17.81 per share of common stock. Shares were originally sold for $25.00 each.
Healthcare Trust, Inc. extended its primary offering in February 2013 under the name ARC Healthcare Trust II and closed in November 2014 after raising $2.2 billion in investor equity.
The Risks of Non-Traded REITs
Many brokerage firms target investors that were retired or near retirement, claiming 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. 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.
Did you lose money investing in ARC Healthcare Trust III or another AR Global offering? If so, the securities attorneys at The White Law Group may be able to help you. You may be able to recover your losses through FINRA arbitration. Please call The White Law Group for a free consultation at 888-637-5510.
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.
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