January 26, 2018 Comments (0) Blog, Current Investigations

Hospitality Investors Trust Losses- Investigation

Hospitality Investors Trust

Hospitality Investors Trust Losses – HIT REIT– $8.75/share

The White Law Group continues to investigate potential claims involving broker dealers who may have unsuitably recommended Hospitality Investors Trust Inc. to investors. If you are concerned about Hospitality Investors Trust losses, The White Law Group may be able to help.

Hospitality Investors Trust is publicly registered non-traded real estate investment trust. The REIT recently changed its name from ARC Hospitality Trust.

As of the first quarter of 2017, the company’s $2.4 billion portfolio was comprised of 141 properties. The REIT’s offering went effective in January 2014 and suspended sales activities in November 2015 after raising $911 million in investor equity, according to reports.

Hospitality Investors Trust Inc. is not currently offering a redemption plan to shareholders and it suspended distributions in January 2017.

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 may suffer significant losses on the sale.

Hospitality Investors Trust Losses – Update on April 4, 2019

According to Central Trade & Transfer, a secondary market for private placements, shares of Hospitality Investors Trust Inc. were recently sold for  just $8.75/share. It appears that the secondary market price would represent a significant loss on their initial capital investment, since the original offering price was $25.00/share.

The Net Asset Value (NAV) for HIT REIT has reportedly decreased by 45% since initial issuance. The NAV is now just $13.87 per share, down from the $25 per share initial purchase price. Further, the REIT suspended distributions in January 2017.

According to SEC filings, on February 28, 2019, Hospitality Investors Trust, Inc. announced that its Board of Directors had suspended the Company’s Share Repurchase Program. This suspension became effective immediately upon the filing of this Current Report on Form 8-K and will remain in effect unless and until the Board takes further action to reactivate the SRP. There can be no assurance the SRP will be reactivated on its current terms, different terms or at all, according to the 8K report.

Risks of Non-traded REITs

Non-traded 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. They are often better suited for sophisticated and institutional investors.

Brokers have an obligation to make investment recommendations that are suitable for their clients. They must consider their risk tolerance, net worth, investment objectives and experience in the market.

Unfortunately, the high sales commission may provide some brokers with enough incentive to make unsuitable investment recommendations. Brokers earn as much as 15% commission for selling REITs.

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.

Free Consultation with a Securities Attorney

If you are concerned about Hospitality Investors Trust losses, The White Law Group may be able to help you by filing a FINRA Arbitration claim against the brokerage firm that sold you the investment.

For 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.

Click here for your FREE consultation.