Investor Alert: CF Net Lease Portfolio V DST
Are you concerned about your investment in CF Net Lease Portfolio V DST? If so, the securities attorneys at The White Law Group may be able to help you by filing a FINRA Arbitration claim against the brokerage firm that sold you the investment.
Cantor Fitzgerald, a real estate brokerage and financing company, is reportedly a “leading inter-dealer broker and a renowned investment bank,” according to its website. The company has invested more than $2 billion in its commercial real estate business infrastructure and offers real estate based alternative investments to investors.
According to SEC filings, the company filed a Form D to raise capital from investors in 2017 for the offering CF Net Lease Portfolio V DST. The entity type was a Delaware Statutory Trust.
Delaware Statutory Trusts (DSTs) are generally offered as replacement property for accredited investors seeking to defer their capital gains taxes through the use of a 1031 tax deferred exchange and as straight cash investments for those wishing to diversify their real estate holdings.
The DST property ownership structure allows the smaller investor to own a fractional interest in large, institutional quality and professionally managed commercial property along with other investors, not as limited partners, but as individual owners within a Trust.
DST ownership essentially offers the same benefits and risks that an investor would receive as a single large-scale investment property owner, but without the management responsibility.
While there may be tax advantages to investing in a DST, there are several downside risks.
Like other real estate, a DST 1031 is considered an illiquid asset. Though you may be receiving cash flow, you won’t have access to any proceeds until the asset is sold, and the program concludes, which could involve a span of 7-10 years or more. 1031 DSTs cannot raise new capital once the investment is made leaving investors holding the bag if expensive repairs are needed or other issues arise – like a drop in occupancy or rental income.
Further, investors in a DST often have no rights or say so in regards to property operations, and more importantly generally no control over when the property will be sold.
The White Law Group is investigating the liability that FINRA registered brokerage firms may have for improperly recommending high-risk investments to investors. Despite the risks of investing in DSTs, brokerage firms continue to push this type of investment because of the high commissions associated with their sale and creation.
Fortunately, FINRA does provide for an arbitration forum for investors to resolve disputes if a broker or brokerage firm makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment. It is possible that they could be found liable for investment losses in a FINRA arbitration claim.
If you are concerned about your investment in CF Net Lease Portfolio V DST, please call the securities attorneys at 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 Franklin, Tennessee.
For more information on The White Law Group and its representation of investors in FINRA arbitration claims, visit https://www.whitesecuritieslaw.com.