How Can SmartStop Self Storage REIT Investors Recover Their Losses?
Our Non-Traded REIT Fraud Lawyers Continue To Investigate Claims Against Broker-Dealers. If you are an investor whose brokerage firm recommended SmartStop Self Storage REIT, you may be trying to figure out how to recover your investment losses. Formerly called Strategic Storage Trust II, this self-managed non-traded real estate investment trust (non-traded REIT) suspended its share redemption program and distribution reinvestment plan in early 2022. However, even if redemptions are possible, investors might not be able to recover their full investment.
SmartStop Self Storage REIT touts itself as “one of the largest self-storage companies in North America.” According to its website, the real estate investment trust has a team of about 450 self-storage professionals, owns or manages approximately 176 properties in Canada and the United States, and has about $2.8B in total capitalization.
Non-traded real estate investment trusts are complex investments that are too risky for many retail customers, retirees, and other conservative and unsophisticated investors. Our experienced non-traded REIT Fraud Lawyers at Shepherd Smith Edwards and Kantas (investorlawyers.com) are speaking to investors who may have unsuitably recommended SmartStop Self Storage REIT to them.
Did Broker Negligence Lead to the Unsuitable Recommendation of SmartStop Shares?
In its yearly Form 10-K report to the US Securities and Exchange Commission (SEC), SmartStop said it paid distributions from money that did not come from its operations’ cash flow and that it might continue to do so. The REIT said that because of this, it would have less money to acquire properties and the overall return for stockholders could be reduced.
SmartStop and affiliated private REIT Strategic Storage Growth Trust II recently merged in a $280M all-stock transaction. In July 2022, Comrit Investments 1 LP and its affiliates sought an unsolicited tender offer to buy SmartStop Self Storage REIT shares for $12.03/share, which was 20% less than the current net asset value (NAV).
Since there is no public trading market for selling SmartStop Self Storage REIT shares, investors will have a difficult time trying to sell their shares. Unfortunately, questions are now being raised as to whether brokerage firms acted too quickly and purportedly failed to conduct the proper diligence before recommending SmartStop Self Storage REIT to customers.
Why File A FINRA Lawsuit Against Your Broker Over Your Non-Traded REIT Investment Losses?
Non-traded real estate investment trusts like SmartStop are often risky, illiquid investments that do not trade on any exchanges. They are speculative in nature and difficult for regulatory agencies to monitor. Unlike private REITs, anyone can invest in a public, non-traded REIT as long as they meet certain investment limits.
Most non-traded REITs charge high fees and commissions, which can, unfortunately, prove to be the greater incentive for brokers looking to make money on customer transactions than their clients’ best interests. This may even compel some financial advisors to fail to conduct the necessary due diligence to make sure that a non-traded REIT is suitable and viable before recommending this type of investment to customers.
If you invested in SmartStop and you are an inexperienced retail customer or retiree with conservative investing goals and a low-risk tolerance level, you may want to consider exploring your legal options with a skilled non-traded REIT fraud lawyer to determine whether you can pursue damages from your broker and their firm.
Unsuitable investment recommendations are among the most common grounds for filing a securities arbitration claim with the Financial Industry Regulatory Authority (FINRA) against your broker-dealer.
Filing this type of action is different from going to court for litigation, which is why you need knowledgeable FINRA lawyers by your side to represent you.
How Can Our Seasoned Broker Negligence Law Firm Help?
For over 30 years, Shepherd Smith Edwards and Kantas have been here fighting for investors from all walks of life in helping them recover their investment losses. Our non-traded REIT Fraud Lawyers have the skills, knowledge, experience, and resources to fight for you against even the largest brokerage firms on Wall Street. Over the years, we have recovered many millions of dollars on behalf of investors.
Call (800) 259-9010 today.