Carter Validus Mission Critical REIT “CV REIT”? Update January 28, 2020
For more information on recovery of your investment losses in Carter Validus / 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 $4.20/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 2019, 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 January 28, 2020 Carter Validus Merger
CV REIT recently merged with an affiliated non-traded REIT, Carter Validus Mission Critical REIT II. The company noted that while the value of its pre- and post-merger real estate portfolio increased, the NAV was negatively impacted by transaction costs incurred from Carter Validus Mission Critical REIT’s debt payoff and other merger-related costs ($0.37), distributions in excess of earnings ($0.08), and a change in the value of interest rate swaps ($0.08), according to filings with the SEC.
As of October 31, 2019, the company reportedly approved an estimated net asset value of $8.65 per share for the REIT’s Class A, Class I, Class T, and Class T2 shares of common stock. The shares originally sold for $10.00 per share, and the previous Net Asset Value was $9.25 per share.
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.