Investment fraud lawyers are currently investigating claims on behalf of investors who suffered significant losses as a result of their investment in Grubb & Ellis REITs. For the period ending March 21, 2011, Grubb & Ellis Company reported an $18.3 million net loss. The company included charges of $2.3 million for bad debt, $3.5 million for depreciation and amortization, $1.7 million for amortization of signing bonuses, $1.7 million in share-based compensation and $0.5 million for intangible asset impairment.
Grubb & Ellis is an investment and commercial real estate services firm. Grubb & Ellis Healthcare REIT acquired Oklahoma City Medical Portfolio in 2008, which consisted of two medical office buildings. Grubb & Ellis Healthcare REIT II acquired four properties comprising five medical office buildings in 2011. Grubb & Ellis Apartment REIT made arrangements to acquire Bella Ruscello Luxury Apartment Homes in 2010.
Securities arbitration lawyers say non-traded REIT investments like the Grubb and Ellis REITs typically offer commissions between 7-10 percent, which is significantly higher than traditional investments like mutual funds and stocks. In some cases, the commission generated by these investments can be as high as 15 percent. This higher commission can explain why brokerage firms are motivated to recommend these investments despite their possible unsuitability.
Investment fraud lawyers are investigating the possibility that full-service brokerage firms may be held liable for the recommendation of the Grubb and Ellis REITs. Financial Industry Regulatory Authority rules have established that brokers and firms have an obligation to fully disclose all the risks of a given investment when making recommendations, and those recommendations must be suitable for the individual investor receiving the recommendation given their age, investment objectives and risk tolerance. Non-traded REITs like this one are illiquid and inherently risky and, therefore, not suitable for many investors.
If you purchased a Grubb & Ellis REIT, or another risky, non-traded REIT, you may be able to recover your losses through securities arbitration. To find out more about your legal rights and options, contact a securities arbitration lawyer at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.