Cole Credit Property Trust II May be Following in the Footsteps of Other Non-traded REITs

by InvestorLawyers on September 14, 2012

in Arbitration,Morgan Stanley,Private Placements,Securities Fraud,Suitability,UBS

Investment fraud lawyers are currently investigating claims on behalf of investors who were improperly sold various non-traded REIT investments and suffered significant losses as a result. Reportedly, Cole Credit Property Trust II is currently in the process of executing its “exit event.” In this event, a non-traded Real Estate Investment Trust either performs an initial public offering or sells its assets.

Cole Credit Property Trust II May be Following in the Footsteps of other Non-Traded REITs

In recent events, other non-traded REITs have gone through this process and securities fraud attorneys say that, in most cases, the event does not go well for investors. As a result of the exit event, many REITs have experienced a significant decline in the offering — often amounting to 30 percent or more of the investment’s value.

As the seventh-largest non-traded REIT in the industry, Cole Credit Property Trust II has invested assets amounting to nearly $3.4 billion. Reportedly, Morgan Stanley and UBS Investment Bank have been hired by Cole Credit Property Trust II to explore their options for the exit event. Investment fraud lawyers encourage Cole Credit Property Trust II investors to closely monitor the REIT’s valuation as, despite an estimated valuation of $9.35 per share, the trend in previous non-traded REITs indicates that the market may not be so kind to the per share valuation.

In many cases, broker-dealers may have failed to adequately perform due diligence on non-traded REITs prior to recommending them for sale to their customers. Furthermore, many brokerage firms may have failed to adequately consider clients’ age, net worth, investment experience and risk tolerance before determining an investment’s suitability for each client. REITs typically carry a high commission which motivates brokers to make the recommendation to investors despite the investment’s unsuitability. The commission on a non-traded REIT is often as high as 15 percent. Non-traded REITs, such as Cole Credit Property Trust II, carry a relatively high dividend or high interest, making them attractive to investors. However, these investments are inherently risky and illiquid, which limits access of funds to investors.

If you suffered significant losses as a result of your investment in a non-traded REIT, you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact a securities fraud attorney at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

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