CNL Lifestyle Properties Investment Losses
The White Law Group continues to investigate claims on behalf of investors that purchased CNL Lifestyle Properties and other non-traded RIETs. Specifically, the firm is investigating the liability that brokerage firms may have for improperly selling these high-risk, illiquid investments.
CNL Lifestyle properties is real estate investment trust (REIT) that focuses on income producing lifestyle properties such as golf, ski, marinas and others. According to Form 8-K filed with the SEC, as of November 2013 CNL Lifestyle Properties owns a portfolio of 138 properties throughout the US and Canada.
Problems with Non-Traded REITs
One of the major downfalls of REITs is the lack of liquidity. Non-traded REITs are not sold on the public market, therefore they lack liquidity. This prevents shares from being sold quickly and forces investors to search for a secondary market that is often very limited and priced significantly below the purchase price. CNL Lifestyles Properties sold on the secondary market from $5.50 to $5.75 in September of this year.
Many brokerage firms target investors that were retired or near retirement, often emphasizing the potential income the REIT may provide. Unfortunately, some brokerage firms failed to disclose that it is not uncommon for REITs to borrow money in order to make distributions. In addition, distributions are often merely a return of principle. REITs are complex high risk products that are not suitable for most investors.To the extent that a brokerage firm improperly sold a non-traded REIT to an investor that either didn’t understand the product or could not afford the risk, that firm may be liable for the resulting losses.
Brokerage firms have a fiduciary duty to its clients to perform adequate due diligence on an investment prior to recommending it for sale to its clients, as well as to ensure that any investment recommended is appropriate in light of the investor’s age, investment experience, net worth, and investment objectives. Given what is now known about CNL REITs (and the many problems with this offering), it is clear that certain of the brokerage firms that sold this investment failed in its fiduciary duty to its clients.
In addition to CNL Lifestyle Properties, The White Law Group is investigating the liability of brokerage firms that sold the following CNL REITs:
- CNL Healthcare Properties
- CNL Growth Properties
- CNL Retirement Properties
- Global Income Trust
Recovery of Investment Losses
If you suffered losses as a result of your purchase of a CNL REIT, please call the securities attorneys of The White Law Group at (888) 637-5510 for a free consultation.
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 and Franklin, Tennessee.
For more information on the firm, please visit https://www.whitesecuritieslaw.com.