Napoli Bern Ripka, LLP has been investigating claims that investors have been improperly placed into non-listed REITs. Non-listed REITs have recently begun to draw the attention of regulators and dissatisfied investors alike. Regulators have become increasingly concerned as brokers potentially misled investors by recommending non-listed REITs as low-cost and low-risk investments.
Non-listed REITs have become attractive cash cows for some brokerage firms in recent years. It is not uncommon for 15% of an individual’s investment to be eaten up by commissions and fund expenses padding the bottom lines of brokerage firms rather than being put to work for investors. Further, investors may be misled into believing their REIT is safe due to inflated list values. Because non-listed REITs do not trade on exchanges, non-listed REITs are rarely revalued and may appear very stable to investors.
One REIT that is under investigation by regulators is Apple REIT, sold by David Lerner & Associates (DLA). DLA has come under fire by the Financial Industry Regulatory Authority (FINRA) for its Apple REIT sales practices of “targeting unsophisticated and elderly customers with unsuitable sales of the illiquid security.” In its action against DLA, FINRA also noted that DLA “earns 10 percent of all offerings of Apple REIT securities as well as other fees. Apple REIT sales have generated $600 million…accounting for 60 to 70 percent of DLA’s business annually since 1996.”
Napoli Bern Ripka, LLP is investigating the following REITs:
- American Realty Capital Trust
- AmREIT
- Apple REIT Eight
- Apple REIT Nine
- Apple REIT Seven
- Apple REIT Six
- Behringer Harvard Multi-Family REIT I
- Behringer Harvard Opportunity REIT I
- Behringer Harvard REIT 1
- CB Richard Ellis Realty Trust
- CNL Lifestyle Properties
- Cole Credit Property Trust
- Cole Credit Property Trust II
- Cole Credit Property Trust III
- Concord Milestone Plus LP
- Cornerstone Core Properties REIT
- Cornerstone Healthcare Plus REIT
- Desert Capital
- Dividend Capital Total Realty Trust
- GC Net Lease REIT
- Grubb & Ellis Apartment REIT
- Grubb & Ellis Healthcare REIT II
- Healthcare Trust of America
- Hines Global REIT
- Hines REIT
- IMH Secured Loan Fund LLC
- Inland American
- Inland Diversified
- Inland Western
- KBS REIT I
- KBS REIT II
- Lightstone Value Plus REIT
- Paladin REIT
- Piedmont REIT
- Prime Group Realty Trust
- Shopoff Properties Trust
- Strategic Storage Trust
- TNP Strategic Retail Trust
- W.P. Carey CPA 14
- W.P. Carey CPA 15
- Wells REIT II
- Wells Timberland REIT
- Whitestone REIT
Napoli Bern Ripka, LLP has successfully advocated for its clients in a wide variety of claims involving financial products, brokerage services, and commercial disputes. The firm does not charge a legal fee unless it recovers money for its clients. To learn more about Napoli Bern Ripka, LLP services contact the firm at (212) 267-3700.
No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers.
Contact: Adam J. Gana
Tel: (212) 267-3700
Email: [email protected]
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