Representing Investors In The SF Bay Area, Silicon Valley, And Surrounding California Regions
From our San Francisco, CA securities law office, Shepherd Smith Edwards and Kantas San Francisco Non-Traded REIT Fraud Lawyers (investorlawyers.com) represent investors who have suffered serious losses because their financial advisor unsuitably marketed and sold them a non-traded real estate investment trust (non-traded REIT).
In 2011, the Financial Industry Regulatory Authority (FINRA) issued an investor alert cautioning against the risks of this type of real estate investment, which can include illiquidity, restricted early redemptions, and high fees.
Yet that hasn’t stopped brokers from promoting non-traded REITs to customers hungry for a chance to get involved in a portfolio of commercial real estate that they might not be able to otherwise invest in as individuals.
Other risks involved in non-traded include:
- Distributions are not guaranteed.
- When distributions are paid they can be heavily subsidized by borrowed money and may include a return of principal.
- Fees involved can eat into an investor’s total return.
- When early redemption is allowed it can be costly.
- While state and FINRA guidelines can limit non-traded REIT front-end fees to 15%—that would mean only 85% of what an investor puts in would be going to work for them.
Why Would An Investor Sue Their Broker For Non-Traded REIT Losses?
A non-traded REIT usually is a long-term investment of seven years or longer. This makes it an unsuitable investment recommendation for older seniors or retail investors who cannot afford to not have access to their funds for that long.
Also, unless the non-traded real estate investment trust buys back shares, there is generally no market to resell unless a liquidity event occurs. Such extreme illiquidity can make this a risky proposition even for long-term investors, who definitely should have been properly apprised of the risks.
Unfortunately, there are financial advisors who continue to unsuitably recommend non-traded REITs to customers, make misrepresentations and omissions about this alternative investment and its risks, overconcentrate an investor’s account with too many non-traded REITs, and commit other kinds of broker misconduct or negligence.
Not only that but there are many broker-dealers whose failure to properly supervise their registered representatives enables this type of reckless behavior that can impact investors’ money.
Shepherd Smith Edwards and Kantas San Francisco Non-Traded REIT Fraud Lawyers have been representing California investors against US broker-dealers for over 30 years. With more than a century’s worth of collective experience in securities law and the securities industry, we know how to determine whether your non-traded real estate investment trust losses warrant grounds for a claim against your financial advisor.
Some of The Many Non-Traded REITs We Are Currently Investigating And/Or Suing Brokers Over:
- Healthcare Trust REIT (HTI)
- NorthStar Healthcare Income REIT
- Starwood Real Estate Income Trust (SREIT)
- Hartman vREIT XXI
KBS Real Estate Investment Trust III - Moody National REIT II
- Cole Capital REITs
- Arc Realty Finance
- Watermark Lodging Trust
- RAD Diversified REIT
- Blackstone Real Estate Income Trust (BREIT)
- Hospitality Investors Trust (HIT REIT)
How Can Our San Francisco Non-Traded REIT Fraud Lawyers Help?
If you contact us today, we can schedule a free, no-obligation case assessment. If we decide to work together, Shepherd Smith Edward and Kantas will conduct a thorough investigation into what happened and we will prepare your FINRA arbitration claim for you.
Our entire firm will provide you with seasoned securities representation and personalized attention throughout any negotiations that may take place and/or argue your lawsuit before the panel of FINRA arbitrators.
Over the decades, we have represented retail investors, seniors, retirees, accredited investors, high-net-worth individual investors, and institutional investors against the largest broker-dealers. Through our dedication and skilled efforts, more than 90% of our clients have received full or partial financial recovery.
Contact Our Northern California Securities Law Firm:
1 Embarcadero Ctr #500
San Francisco, CA 94111
In the San Francisco Bay Area, Silicon Valley, the East Bay, and surrounding California regions, you can call (415) 287-0877 or (800) 259-9010.
**For Southern California residents, we have a San Diego law office.