The Parking REIT – MVP REIT II – Securities Investigation
The Parking REIT, Inc. (formerly known as MVP REIT II, Inc.) is a publicly registered, non-listed REIT that invests primarily in parking lots and garages in the United States. Its assets include 44 parking facilities located in 15 states.
On March 22, 2018, the board of The Parking REIT Inc., announced it has unanimously authorized a suspension of the company’s cash distributions and stock dividends, effective immediately.
The Board claims “it is focused on preserving capital in order to maintain sufficient liquidity to continue to operate the business and maintain compliance with debt covenants, including minimum liquidity covenants and to seek to enhance the value of the Company for stockholders through potential future acquisitions.”
The Company expects that cash retained by the suspension of cash distributions will allow the Company to continue to pursue investment opportunities while also preparing for a “possible liquidity event” in the future.
According to the SEC company filings, there can be no assurance that the Company will resume payment of distributions to common stockholders at any time in the future, that any acquisitions will be completed on an attractive basis, or at all, or that any liquidity event will occur or when such event may occur.
On March 7, 2018, The Parking REIT, Inc. filed an 8-K report detailing its recommended response to shareholders regarding a mini-tender offer announced by MacKenzie Realty Capital, Inc. on March 5, 2018. The Parking REIT’s board does not endorse the unsolicited mini-tender offer and recommends that stockholders do not tender their shares.
Unfortunately for investors, you cannot sell your shares of The Parking REIT on the market. It is an illiquid investment that has not stated when it will liquidate. In March we told you about a recent tender offer from Mackenzie Realty Capital to purchase shares of the Parking REIT for $12.17/share. The original purchase price was $25.00/share.
On March 7, 2018, the company filed an 8-K report recommending shareholders disregard the mini-tender offer from MacKenzie Realty Capital.
The Risks of Non-traded REITs
Non-traded REITs are complicated and often risky investments which should only be sold to high-net worth and sophisticated investors.
The White Law Group is investigating the liability that FINRA registered brokerage firms may have for improperly selling high-risk REITs, like The Parking REIT, to investors.
Notwithstanding the risks of investing in REITs, brokerage firms continue to push this type of investment because of the high commissions associated with their sale and creation. Brokerage firms generally make between 7-10% for selling a REIT, which is far in excess of the typical commission for more traditional investment types.
To speak with a securities attorney regarding your investment in The Parking REIT, or another non-traded REIT, please call 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 White Law Group, visit the firm’s website at https://www.whitesecuritieslaw.com.