Bad News for Investors in Benefit Street Partners Realty Trust
Have you suffered losses investing in Benefit Street Partners Realty Trust (BSP Realty Trust)? If so, the securities attorneys at The White Law Group may be able to help you recover your losses through FINRA arbitration.
Benefit Street Partners Realty Trust, Inc., a real estate finance company, originates, acquires, and manages a portfolio of commercial real estate debt investments secured by properties located in the United States and internationally, according to Bloomberg.
Update on July 1, 2020
According to Central Trade & Transfer, a secondary market for alternative investments, shares of Benefit Street Partners are currently listed for sale for just $10.50 per share. The original offering price was $25 per share, suggesting big losses for investors.
After temporarily suspending its Distribution Reinvestment and Stock Purchase Plan in March 2020 the company announced it will resume the plan for the second-quarter 2020 dividend. As we previously reported, in April the company transitioned the timing of its dividend payments from monthly to quarterly on its Series A Convertible Preferred Stock and its Series C Convertible Preferred Stock.
According to new reports, the company has declared a quarterly cash dividend equivalent to $1.10 per annum, and a quarterly cash dividend per share of its Series A convertible preferred stock and Series C convertible preferred stock equivalent to the amount of distributions that would be paid upon a conversion of such share of preferred stock into common stock.
The Company expects to pay these second quarter 2020 dividends in the first week of July 2020.In 2019, the Company’s board of directors authorized and declared ongoing monthly distributions at a rate equivalent to $1.44 per annum, per share. This rate had been consistent since Q3 2017.
Update on April 14, 2020
On March 30, The REIT reportedly suspended its distribution reinvestment and stock purchase plan, effective immediately. The company said that until it reactivates the DRIP, shareholders will receive any distributions in cash, including March 2020 distributions that are paid in April 2020. No reason was given for the suspension in a filing with Securities and Exchange Commission, but other non-traded REITs have recently made similar suspensions in response to the Covid-19 global pandemic.
The company indicated the suspension is temporary.
January 3, 2020 Tender Offer Suggests Losses for Investors
The REIT’s shares aren’t traded on any market. It is an illiquid investment that has not stated when it will liquidate. The REIT’s SRP was oversubscribed this year leaving 1,934,369 shares that were not repurchased.
On December 30, 2019, MacKenzie Realty Capital extended a tender offer to purchase shares of Benefit Street Partners for just $11.76/share. According to the offer letter, the company announced an estimated NAV of $18.57 per share in September 2019, 26% lower than the original offering price was $25.00/share.
Unfortunately, the annual distribution also declined 30% in 2017. The distribution was cut from $2.06 a year to $1.44 a year.
Non-traded REITs are complicated and often risky investments which should only be sold to high-net worth and sophisticated investors. According to the Benefit Street Partners’ prospectus, “Investing in our common stock involves a high degree of risk. You should purchase these securities only if you can afford a complete loss of your investment.”
Notwithstanding the risks of investing in REITs, brokerage firms continue to push this type of investment because of the high commissions associated with their sale and creation. Brokerage firms generally make between 7-10% for selling a REIT, which is far in excess of the typical commission for more traditional investment types.
Free Consultation with a Securities Attorney
The White Law Group is investigating the liability that FINRA registered brokerage firms may have for improperly selling high-risk REITs to their clients.
To speak with a securities attorney regarding your investment in Benefit Street Partners Realty Trust, please call 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 the firm’s website at https://www.whitesecuritieslaw.com.