Griffin-American Healthcare REIT III Suspends Distributions, Updated June 5, 2020
Have you suffered investment losses in Griffin-American Healthcare REIT III? If so, The White Law Group may be able to help you recover your losses through FINRA arbitration.
Griffin-American Healthcare REIT III reportedly invests in healthcare real estate assets, focusing primarily on medical office buildings, hospitals, skilled nursing facilities, senior housing and other healthcare-related facilities.
Update on June 5, 2020
Griffin-American Healthcare REIT III Inc. has suspended monthly distributions to shareholders after paying the May 2020 distribution on June 1, 2020. The company also suspended its distribution reinvestment plan and share repurchase plan, noting the effects of the COVID-19 global pandemic on the healthcare sector and its portfolio.
The REIT’s advisor has reportedly agreed to defer 50 percent of the asset management fee for six months, effective June 1, 2020, which the company claims will further enhance its capital position in the coming months.
In May we reported that the REIT’s board of directors had reportedly reduced the company’s monthly investor distributions and suspended the share repurchase plan (SRP).
At that time, the company indicated that the coronavirus (COVID-19) global pandemic presents a challenge to owners and operators of healthcare facilities and while the company has not yet experienced ”a material impact to our operations as a result of the pandemic, we anticipate that this will change as the virus continues to spread.” The REIT noted that it believes that “conditions require that we make every effort to further strengthen the long-term financial prospects of the company.”
Distribution payments were reportedly cut in half — from an annualized rate of $0.60 per share to $0.30 per share beginning with the April 2020 distribution, which will be paid on May 1, 2020. In addition, the share repurchase plan was suspended except for requests resulting from the death or qualifying disability of stockholders.
Further, the secondary sales price of Griffin-American Healthcare REIT III may suggest losses for investors. Shares of the REIT are currently listed to sell for just $5.70 per share, according to Central Trade & Transfer, a secondary market for alternative investments. The original offering price was $10.00 per share.
Is a Non-traded REIT a Suitable Investment for you?
The White Law Group is investigating potential securities fraud claims involving broker-dealers’ improper recommendation that investors purchase high-risk non-traded REIT investments. Many investors are not fully aware of the problems and risks associated with these investments before purchasing them.
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%. Brokers have an obligation to make investment recommendations that are consistent with their clients risk tolerance, net worth, investment objectives and experience in the market. Unfortunately, in many cases, the high sales commission may provide some brokers with enough incentive to make unsuitable investment recommendations.
In addition to the high risks, non-traded REITs, like Griffin-American Healthcare REIT III 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.
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. Firms that fail to do so, may be held responsible for any losses in a FINRA arbitration claim.
If you suffered losses investing in Griffin-American Healthcare REIT III and would like a free consultation with a securities attorney, please call The White Law Group at 888-637-5510.
The White Law Group is a national securities arbitration, securities fraud, and investor protection law firm with offices in Chicago, Illinois and Franklin, Tennessee.
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