InPoint Commercial Real Estate Income Suspends Distributions, Repurchases

Have you suffered investment losses in InPoint Commercial Real Estate Income? If so, The White Law Group may be able to help you recover your losses by filing a FINRA Dispute Resolution claim against the brokerage firm that sold you the investment.

Shares of mortgage real-estate investment trusts declined sharply in March, according to The Wall Street Journal, reflecting growing concerns about firms that “use borrowed money to juice returns at a time when funding markets are in turmoil.”

The board of InPoint Commercial Real Estate Income Inc., a commercial mortgage real estate investment trust, has reportedly suspended the company’s public offering, share repurchase plan, distributions, and distribution reinvestment plan, indicating the global pandemic COVID-19 as the reason for the decision, according to SEC filings.

The closure of non-essential businesses in order to limit the spread of the Coronavirus has had a huge impact on commercial real estate,  affecting the ability of commercial and residential tenants to pay rent, according to the company.

According to S&P Global, close to half of the mortgage REITs in the U.S. lowered or suspended their dividend payments due to the financial turmoil attributed to the COVID-19 global pandemic.

According to a shareholder letter on April 30, 2020, InPoint Commercial Real Estate Income, Inc. stated that it will not be able to “accurately calculate a NAV for the InPoint share classes due to the continued uncertainty surrounding the commercial real estate market.”

InPoint reportedly disclosed that 13% of its first mortgage loans, (almost 72% of total assets as of year-end 2019), were issued to borrowers in the hospitality and retail industries, with the remaining 87% across industrial, office and multifamily properties.

The REIT reportedly collected regular monthly debt service payments from all but one of its borrowers in April, indicating that it had entered into a modification with that single borrower.  It also noted that it was required to post additional collateral on certain repurchase facilities related to commercial mortgage backed securities (CMBS).  CMBS comprise approximately 22% of total assets. The REIT stated that it is selling off certain CMBS securities to reduce funding from repurchase facilities.

The mortgage REIT originated $65.4 million in floating-rate first mortgage loans during the first quarter of 2019.

InPoint reportedly seeks to originate, acquire and manage a diversified credit portfolio secured by commercial real estate properties primarily within the United States.

Investigating Potential Lawsuits

The White Law Group continues its investigation into the  liability that FINRA registered brokerage firms may have for improperly selling mortgage REITs, like InPoint Commercial Real Estate Income, to clients.

Fortunately, FINRA does provide an arbitration forum for investors to resolve such disputes. If a broker or brokerage firm makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment they may be found liable for investment losses in a FINRA arbitration claim.

Free Consultation

Please contact The White Law Group at 1-888-637-5510 for a free consultation, to determine whether you may be able to recover investment losses incurred as a result of your purchase of InPoint Commercial Real Estate Income.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee. The firm represents investors throughout the country in claims against their brokerage firm.

For more information on the firm and its representation of investors, visit www.WhiteSecuritiesLaw.com.