Presidio Property Trust Secondary Market Price suggests Losses for Investors
The White Law Group continues to investigate FINRA arbitration claims involving non-traded REITs such as Presidio Property Trust.
Unfortunately for investors it appears that many financial advisors/brokerage firms that sold non-traded REITs such as Presidio Property Trust, may have understated or misrepresented the risks and liquidity problems.
Presidio, based in San Diego, CA, invests in industrial, office, retail and model home residential properties located throughout the United States, according to its website.
According to reports this month, the company plans to list on the Nasdaq under the symbol SQFT. Its initial public offering intends to raise up to $8.6 million with nearly 1.3 million shares of Series C common stock priced between $5 to $7 per share.
The offering proceeds will reportedly be used for general corporate and working capital purposes, including to potentially purchase additional properties and reduce debt, according to filings with the SEC. Aegis Capital Corporation reportedly serves as the book runner for the offering.
Secondary Sales Price – $3.15 per share
According to Central Trade & Transfer, a secondary market for non-traded REITs, shares of Presidio were sold for just $3.15 per share in November 2019. The original offering price was $10 per share.
Presidio Property Trust estimated its net asset value was $5.48 per share as of March 31, 2018.
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%. In addition to the high risks, non-traded REITs 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.
Filing a Complaint Against your Brokerage Firm
Prior to making recommendations to an individual investor, brokerage firms are required by the Financial Industry Regulatory Authority (FINRA) to disclose all the risks of an investment. Recommendations should only be made if the investment is suitable for an individual investor given their age, investment objections, investment experience and risk tolerance.
Brokerage firms that do not perform adequate due diligence on an investment and/or make unsuitable recommendations can be held accountable for investment losses through FINRA arbitration.
High commissions could be a motivating factor for unscrupulous financial advisors to sell non-traded REITs regardless of whether the investment is in line with the client’s investment objectives and profile. Moreover, the total commissions and expenses make it difficult for the REIT to perform in line with the market.
Free Consultation with a Securities Attorney
If you are concerned about your investment in Presidio Property Trust, you may be able to file a complaint against your brokerage firm. Please call the securities attorneys of 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, visit https://www.whitesecuritieslaw.com.