Investors Never Advised of Substantial Risks of Unlisted REITs

Napoli Bern Ripka LLP warns investors of inappropriate industry sales practices in the sale of unlisted real estate investment trusts. Investors across the country are seeking to enforce their right to be compensated for losses stemming from their advisors unsuitable recommendation of unlisted, or non-traded, real estate investment trusts (REITs). Investors allege that brokers failed to fully disclose the risks inherent in this investment.

Unlike listed REITs whose value is set daily by the market, unlisted REITs are valued by the staff of the REIT that can often create a conflict of interest during challenging economic times. Selling an unlisted REIT is also very different because of individual sales procedures. Depending on the REIT, an investor may be limited to selling their position through a redemption program that may actually be suspended if too many investors seek to redeem at once. This can leave an investor unable to liquidate their position and left holding what may have been an unsuitable investment.

Investors are alleging that the almost 15% commission offered to advisors may have led them to omit the limitations and risks of investing in this unique product. Legal causes of action include the failure to recommend suitable investments, breach of contract, breach of fiduciary duty and negligence. If you were invested in REITS such as the Behringer Harvard REIT, you may have right to be compensated for your loss to rescind the entire transaction. To learn more about the suitability of this investment to your investment portfolio, please contact Adam J. Gana of Napoli Bern Ripka LLP for a free and confidential consultation.