Concerned about your investment in “CV REIT”? Update May 17, 2019
For more information on recovery of your investment losses in CV REIT, press play for a short video.
The White Law Group continues to investigate potential securities fraud claims involving broker dealers who may have improperly recommended high risk non-traded REITs such as CV REIT to investors.
According to recent filings with the Securities and Exchange Commission (SEC), CV REIT determined that it reached the share limitation for the 2019 first quarter Repurchase Date, and that it will not be able to fully process all repurchase requests for such Repurchase Date. This could be bad news for investors who are ready to sell their shares.
The problem with non-traded REITs such as CV REIT, is they are typically high-risk, complex and illiquid. Non-traded REITs do not trade on a stock exchange, and often when the investors are ready to sell, they cannot find a buyer. A secondary market may be an option for some investors, though they may find they are selling their shares at a loss.
Recently shares of CV REIT were listed on Central Trade & Transfer, a secondary market for non-traded REITs and private placements, for just $4.12/share. The original offering price was $10/share.
More Bad News for Investors
Aside from the usual risks of non-traded REITs, CV REIT has been faced with some other issues that could signify bad news for investors. As we told you in May, Bay Area Regional Medical Center, LLC, which accounted for approximately 20.9% of Carter’s 2017 rental revenue, has closed its operations and filed for bankruptcy.
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. Brokerage Firms that fail to do so, may be held responsible for any losses in a FINRA arbitration claim.
Update on April 12, 2019
According to reports today, Carter Validus Mission Critical REIT Inc. (CVMC REIT I) and Carter Validus Mission Critical REIT II Inc. have entered into a definitive agreement to merge in a stock and cash transaction, creating an entity valued at approximately $3.2 billion.
The transaction is expected to close in the second half of 2019, with the approval of CVMC REIT I stockholders.
The combined company will retain the name Carter Validus Mission Critical REIT II Inc. and will own 146 healthcare and data center properties in 33 states, totaling approximately 8.4 million square feet of space, according to reports.
Under the new agreement, CVMC REIT I stockholders will reportedly receive $1.00 per share in cash and 4681 shares of CVMC REIT II Class A common stock for each share of CVMC REIT I common stock owned.
CVMC REIT I declared an estimated net asset value of $5.33 per share, as of June 30, 2018, according to SEC filings. The company’s previously declared NAV per share was $9.26. Shares were originally sold for $10.00 each.
Update on April 23, 2019
Mackenzie Realty Capital has just extended an unsolicited tender offer to purchase shares of Carter Validus REIT for just $3.16/share.
According to Mackenzie, the merger is subject to closing conditions and “its consummation cannot be assured. Even if approved, however, there can be no guarantee that the merger will close in a timely manner, or at all, and does not provide full cash-out to Carter stockholders.”
Further, the repurchase program is now reportedly limited to requests in connection with the death, qualifying disability, or involuntary exigent circumstances of a stockholder. Also, Carter Validus II could be similarly limited, making it difficult for investors to sell any or all their shares in the repurchase program.
If you are concerned about your investment in CV REIT please call The White Law Group at (888) 637-5510 for a free consultation with a securities attorney.
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 and its representation of investors, please visit www.whitesecuritieslaw.com.