Recovery of investment losses – Hospitality Investors Trust (HIT REIT)
Have you suffered investment losses in Hospitality Investors Trust (HIT REIT)? If so, the securities attorneys at The White Law Group may be able to help you to recover your losses through FINRA Dispute Resolution.
Hospitality Investors Trust Inc. was formerly known as American Realty Capital Hospitality Trust Inc. The publicly registered non-traded real estate investment trust changed its name following its transition to a standalone self-managed REIT.
HIT REIT went effective in January 2014 and suspended sales activities in November 2015 after raising $911 million in investor equity, according to reports. As of the first quarter of 2017, the company’s $2.4 billion portfolio was comprised of 141 properties.
The REIT suspended distributions in January 2017. The company is not currently offering a redemption plan to shareholders.
Non-traded REITs like Hospitality Investors Trust Inc. often lack liquidity. Investors looking to sell often have difficulty finding a buyer, and if they are able to find one can suffer significant losses on the sale.
Mackenzie Capital Management has just extended a tender offer to purchase shares of the REIT for $7.05/share. Unfortunately for many investors, it appears that tender offer price would represent a significant loss on their initial capital investment.
Additionally, the NAV has decreased by 45% since initial issuance. The NAV is now $13.87.
Update on May 1, 2019 -Liquidity Problems – Secondary Sales Price $8.25/Share
Investors looking to sell non-traded REITs, like HIT REIT, often have difficulty finding a buyer, and can suffer significant losses on the sale.
Unfortunately for investors, Central Trade & Transfer, secondary market for non-traded REITs, recently listed shares of HIT REIT for just $8.25 per share in May 2019. This may mean significant losses to investors, as the original offering price was $25.00 per share.
Risks of Non-Traded REITs
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.
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.
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.
The White Law Group continues to investigate potential securities fraud claims involving broker-dealers’ improper recommendations of high-risk non-traded REITs, like HIT REIT.
If you suffered losses investing in Hospitality Investors Trust, Inc. you may be able to recover your losses. 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.