Concerned about your investment losses in Watermark Lodging Trust Inc?
The White Law Group continues to investigate potential securities claims involving Watermark Lodging Trust, Inc. a non-traded REIT formed by the merger of Carey Watermark Investors 2 Inc. and Carey Watermark Investors.
After the merger, the REIT declared its first post-merger net asset value (NAV) of $5.51 per Class A share and $5.45 per Class T share. Original shares were sold for $10 each indicating nearly a 50% loss.
Last April we reported that the REIT had to close all of its hotels due to the Covid-19 global pandemic, and were generating no revenues while lockdown orders were in effect.
According to the filings with the SEC, the company noted that it has $277 million in debts scheduled to mature in 2020, the debts are nonrecourse and some feature extension options. Watermark noted that if it is unable to repay, refinance, or extend these loans, foreclosure of the underlying hotels is a possibility, further noting that the company may seek to give properties back to the lenders.
The company will reportedly seek to raise capital through asset sales at potential discounts, prospective joint venture arrangements and issuance of additional equity securities that may be dilutive to current stockholders. The company also “anticipates difficult market conditions for the foreseeable future.”
On June 30, 2020, the Board of Directors determined that the current suspension of the Company’s redemption program will remain in effect until the board determines to lift the suspension.
The company delayed financial filings in May and indicated that the full extent of the effects of the COVID-19 pandemic on its business for the foreseeable future cannot be predicted with certainty, but noted it had suspended operations at approximately half of its hotels and significantly reduced staffing levels at its remaining properties.
Secondary Sales Price – $3.70 per share
According to Central Trade & Transfer, a secondary market for alternative investments, shares of Watermark Lodging Trust recently sold for just $3.70 per share. The original offering price was $10 per share, suggesting big losses for investors.
Non-traded REITs are generally complex, high risk investments and not suitable for every investor. They are also illiquid, meaning they are not traded on any market. Often investors find themselves in the situation of being unable to sell the investment when they are ready. If they are able to find a buyer, it is often at a reduced price.
Filing a Complaint against your Brokerage Firm
If you are concerned about your investment in Watermark Lodging Trust (fka Carey Watermark Investors I and II), the White Law Group may be able to help you. For a free consultation with a securities attorney, please call 888-637-5510.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois.