Corporate Property Associates 17 – Global Inc. Suspends Share Redemption Plan
According to SEC filings this week, Corporate Property Associates 17 – Global Inc., is planning to merge with WP Carey in a stock-for-stock transaction valued at approximately $6 billion. If approved by stockholders, the transaction is expected to close around December 31, 2018.
Corporate Property Associates 17 –Global Inc. is a publicly registered non-traded real estate investment trust (REIT) sponsored by W.P. Carey Inc. Due to the new merger plans, the REIT has suspended its share redemption plan effective immediately, except for special circumstances.
Special circumstances can include the death or disability of a stockholder, provided that the latter was not preexisting when the stockholder invested in the REIT, according to the board.
The Problem with Non-Traded REITs
The White Law Group continues to investigate potential securities fraud claims involving broker-dealers’ improper recommendation that investors purchase high-risk non-traded REIT investments, like Corporate Property Associates 17 – Global Inc. Many investors are not fully aware of the problems and risks associated with these investments before purchasing them.
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 and often better suited for sophisticated and institutional investors.
Another problem often associated with REIT recommendations is the high sales commissions brokers typically earn for selling REITs – as high as 15%.
Brokers have an obligation to make investment recommendations that are consistent with their clients risk tolerance, net worth, investment objectives and experience in the market. Unfortunately, in many cases, the high sales commission may provide some brokers with enough incentive to make unsuitable investment recommendations.
In addition to the high risks, non-traded REITs, like Corporate Property Associates 17 – Global Inc. often lack liquidity. Investors looking to sell these investments often have difficulty finding a buyer, and if they are able to find one can suffer significant losses on the sale.
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.
If you suffered losses investing in Corporate Property Associates 17 – Global Inc. and would like 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.