Pacific Oak previously expressed “substantial doubt” about its ability to continue as a going concern, according to its latest quarterly report on Form 10-Q filed with the U.S. Securities and Exchange Commission (“SEC”) for the quarter ended June 30, 2025.  Also earlier this year, Pacific Oak’s longtime Chief Financial Officer, Michael A. Bender, resigned.

In a more recent SEC filing in November 2025, Pacific Oak described a “difficult financial situation” and reported operating losses of $117.2 million on sales of only $26.56 million.  Pacific Oak also announced that it has initiated a formal review of strategic alternatives. The REIT has significant major debt maturities in the next year, meaning that a large portion of its loans have come due and will have to either be refinanced or paid off.  According to recent reports, Pacific Oak faces more than $512.8 million in debt obligations coming due within the next year, including debts related to bond that it issued that were denominated in Israel shekels.

Pacific Oak has also publicly stated that in October 2025, its Board of Directors formed a special committee of independent directors to evaluate all available strategic options- which could include a merger, recapitalization, listing on a stock exchange, or liquidation.  Pacific Oak has retained investment banking firm Robert A. Stanger & Company Inc. to advise on the process.  

Non-traded REITs like Pacific Oak are generally illiquid investments.  Unlike traditional stocks and mutual funds, non-traded REITs do not trade on a national securities exchange.  Many uninitiated investors in non-traded REITs have come to learn too late that their ability to exit their investment position is limited.  Typically, investors in non-traded REITs can only exit their investment through redemption directly with the sponsor on a limited basis, and often at a disadvantageous price, or through sales in a limited secondary market.   As of April 2025, Pacific Oak’s net asset value or “NAV” per share was reported at $5.72, down from $8.03 in September 2023 and $10.50 in September 2022. This NAV reflects a 23.5% decline from 2022 to 2023 and a further slide into 2025. In online secondary market platform trading, shares have reportedly been traded as low as between $0.48 and $0.75 per share.

Investors who wish to discuss a possible claim concerning Pacific Oak or another alternative investment may contact a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation.  Attorneys at the firm are admitted in New York, Wisconsin and various federal courts around the country, and handle cases nationwide (in cooperation with attorneys located in those states if required by applicable rules). 

This article is intended as ATTORNEY ADVERTISING and is not an official announcement.

Pacific Oak has expressed “substantial doubt” about its ability to continue as a going concern, according to its latest quarterly report on Form 10-Q filed with the U.S. Securities and Exchange Commission (“SEC”) for the quarter ended June 30, 2025.   Pacific Oak faces multiple challenges including debt maturities and a difficult commercial real estate market.  

 Pacific Oak closed its initial public offering in 2012, and was designed to capitalize on the “dislocation, lack of liquidity, and government intervention” that exists in commercial real estate markets, according to its website.  In 2020, Pacific Oak Strategic Opportunity REIT II shareholders approved a merger into Pacific Oak.

Pacific Oak’s real estate portfolio’s value was written down in the aggregate by $52 million during the second quarter as a direct result of “declines in market conditions and projected cash flows.”  The REIT’s portfolio remains highly concentrated in California and Tennessee, which the company noted makes it “particularly susceptible to adverse economic developments” in those region’s real estate markets. As of the end of the quarter, California and Tennessee properties accounted for 11.2% or $113.3 million; and 10.1% or $102.5 million of the company’s total assets, respectively.  As of June 30, 2025,  the company’s portfolio reportedly consisted of eight office complexes (64% occupied), a residential home portfolio of 2,078 homes (92% occupied), one apartment property (90% occupied), a hotel, and several undeveloped land and development properties. The company also confirmed it was compliant with all debt covenants as of its previous report on Dec. 31, 2024.

Earlier this year, Michael A. Bender resigned from his positions as Pacific Oak’s vice president, chief financial officer, treasurer, and secretary of the company effective, April 17, 2025.  In March 2025, the online publication AltsWire reported that Pacific Oak REIT had borrowed $8 million from its advisor. The loan was increased by $2 million on June 26, 2025.

 Non-traded REITs like Pacific Oak are generally illiquid investments.  Unlike traditional stocks and mutual funds, non-traded REITs do not trade on a national securities exchange.  Many uninitiated investors in non-traded REITs have come to learn too late that their ability to exit their investment position is limited.  Typically, investors in non-traded REITs can only exit their investment through redemption directly with the sponsor on a limited basis, and often at a disadvantageous price, or through sales in a limited secondary market.   As of April 2025, Pacific Oak’s net asset value or “NAV” per share was reported at $5.72, down from $8.03 in September 2023 and $10.50 in September 2022. This NAV reflects a 23.5% decline from 2022 to 2023 and a further slide into 2025. In online secondary market platform trading, shares have reportedly been traded as low as $2.50 per share.

Investors who wish to discuss a possible claim concerning Pacific Oak or another alternative investment may contact a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation.  Attorneys at the firm are admitted in New York, Wisconsin and various federal courts around the country, and handle cases nationwide (in cooperation with attorneys located in those states if required by applicable rules). 

This article is intended as ATTORNEY ADVERTISING and is not an official announcement.

“Auto-callable” notes are structured products that are often sold as higher-yielding alternatives to bonds, which obscures the fact that investors’ potential losses are much larger and much more likely to occur than in a bond investment. But during the years 2020-22, when record low interest rates prevailed, sales of “auto-callable” notes skyrocketed, peaking at $40.1 billion in 2021. Desperate for income, investors were often sold these notes based on a sales presentation that focused on yields approaching 10% a year.

But these high stated yields can be misleading for a simple reason- the investor actually receives the stated and advertised yield only under certain conditions. If the price of the referenced stock rises above the referenced stocks price at the time of issuance, the notes are “auto-called” and the income yield ceases. By called, it is meant that the note is bought back from the investor by issuer. Once the note is called the investor receives no more distributions and essentially breaks even on the investment, except for any distributions that he or she may have received to date.

If the price of the referenced stock falls below a certain level (often between 60-75% of the referenced stock’s price when the notes were issued), yields also cease unless and until the price of the referenced stock rebounds to above this so-called “coupon barrier” price. Thus the referenced stock must stay within a “Goldilocks”-style trading range- neither rising nor falling “too much”- for the investor to receive distributions.

It is bad enough that much of the time, investors do not even received the advertised yield because the referenced stock’s price is either too high or too low. But worst of all, and often not fully and fairly disclosed to investors, if the referenced stock falls below a certain level referred to as the “knock-in” price (sometimes for example 50% of the price of the time that the “auto-callable” note is sold) investors then lose a sum of money equal to approximately the entire loss in value of the stock itself. Therefore, if the stock crashes and stays at a low price immediately after purchase, auto-callable notes may result in the loss of the entire principal invested. For example, investors lost nearly all of their investment in a matter of days in connection with certain auto-callable notes linked to Silicon Valley Bank, which collapsed in the spring of 2023.

Taking into account all of these features, the investor is left with an investment with limited return potential and the potential for very high losses- a proposition that few investors would accept if given a balanced presentation concerning these high risk structured products.

“Auto-callable” notes pose several additional risks and drawbacks to investors, including the following:

Illiquidity. Structured notes are primarily designed to be buy-and-hold investments. While some notes have relatively short maturities, measured in months, others might extend out for 10 years or more. “Auto-callable” notes are not listed on an exchange, and there’s no guarantee of a secondary market for trading them, meaning an investor may have no realistic option to sell them at a fair price before maturity.

Pricing. Prior to the issuance of a structured note, the issuer provides an initial estimated value of the note. This value is based on an internal valuation model that prices the embedded components used to structure the note’s payoff. The initial estimated value is generally less than the price of the note, meaning that you’re investing an amount per note that exceeds its estimated value. Many “auto-callable” notes are worth only around 93-95% of the purchase price at the time of purchase.

Credit Risk. Structured notes are unsecured debt obligations of the issuer, meaning that the issuer is obligated to make payments on the notes as promised. If the structured note issuer defaults on these obligations, investors may lose some, or all, of the principal amount they invested in the structured notes as well as any other payments that may be due on the structured notes.

Commissions. These notes oftentimes have embedded commissions of over 2%.

Brokerage firms and financial institutions that have reportedly issued large quantities of at least $1 billion worth of “auto-callable” notes over the past decade include the following:

Institution Issuance

UBS $26.1 billion

Goldman Sachs $22.3 billion

JP Morgan $21.9 billion

Morgan Stanley $20.5 billion

Barclays $17.2 billion

Credit Suisse $11.5 billion

HSBC $10.5 billion

Bank of America $6.7 billion

BMO $5.5 billion

RBC $5.3 billion

Toronto Dominion (TD) $2.8 billion

CIBC $1.5 billion

Brokers are required by FINRA to only recommend investments that suit their investor’s needs. (Read more about FINRA Rule 2111: “The Suitability Rule.”) The fact that these bonds risk losing the entire principal investment makes them unsuitable for many investors. Investors who expressly stated that they wanted conservative investments should not have been placed in these high-risk notes.

Further, for investments after June 2020, brokers and financial advisors have a duty under SEC Regulation BI (84 Fed. Reg. 33318 et seq.), to act in the brokerage customers’ best interest. And must give “advice . . . that is in the best interest of the retail investors and that does not place the interest of the firm or the financial professional ahead of the interests of the retail investor.” Perhaps most notably in the case of “auto-callables” the advisor also has the obligation to consider reasonably available alternatives as part of determining whether recommending a given product to investors is appropriate. One could query whether any “income” investment that has a fixed yield, only payable under limited circumstances, and which poses the risk of the loss of the entire principal invested, is ever a reasonable recommendation when there are so many readily available alternatives without similar drawbacks.

Investors who wish to discuss a possible claim may contact a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation. The firm has handled numerous cases against financial advisors who allegedly made misleading or unsuitable recommendations of alternative investments, including structured products. Attorneys at the firm are admitted in New York, Wisconsin and various federal courts around the country, and handle cases nationwide (in cooperation with attorneys located in those states if required by applicable rules).

THIS ARTICLE IS INTENDED AS ATTORNEY ADVERTISING AND IS NOT AN OFFICIAL ANNOUNCEMENT

HTI, a publicly registered, non-traded real estate investment trust or “REIT”, recently announced that it intends to transition to self-management in anticipation of a potential future listing of its common stock on a national securities exchange. The REIT expects the internalization to close no later than the fourth quarter of 2024.

HTI reportedly acquires, owns, and manages a diversified portfolio of healthcare-related real estate, focused on medical office and other healthcare-related buildings, and senior housing operating properties. As of March 31, 2024, the company reportedly owned 208 properties located in 33 states and comprised of 9.1 million rentable square feet. Its total assets were approximately $2.13 billion, about a 1.68% decrease from the previous year’s approximate $2.17 billion.

HTI’s management has stated that its estimated net asset value (or “NAV”) per share is $14.00, which is significantly lower than the initial offering price of $25.00/share. However, bids and offers in the very limited online secondary market show that shares have changed hands for as little as $2.50 a share, suggesting that investor losses may be far higher than the REIT has acknowledged to date.

As a publicly registered non-traded REIT, HTI was permitted to sell securities to the investing public at large, including numerous unsophisticated retail investors who bought shares upon the recommendation of a broker or money manager. HTI began offering shares to the public in 2013 and reportedly raised of $2 billion via sales of stock.

Non-traded REITs are generally illiquid investments. Unlike traditional stocks and mutual funds, non-traded REITs do not trade on a national securities exchange. Many uninitiated investors in non-traded REITs have come to learn too late that their ability to exit their investment position is limited. Typically, investors in non-traded REITs can only exit their investment through redemption directly with the sponsor on a limited basis, and often at a disadvantageous price, or through sales in a limited secondary market.

If HTI lists its shares on a stock exchange, investors’ ability to sell their shares will be enhanced. However, past history of direct listings of non-traded REITs on stock exchanges suggests that the REIT’s shares will likely trade at a substantial discount to their net asset value or “NAV”. Investors may be in for a surprise if they are relying on the reported NAV of $14.00 as reflecting the value that they can realize when they sell shares.

Investors who wish to discuss a possible claim concerning HTI or another alternative investment may contact a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation. Attorneys at the firm are admitted in New York, Wisconsin and various federal courts around the country, and handle cases nationwide (in cooperation with attorneys located in those states if required by applicable rules). This article is intended as ATTORNEY ADVERTISING and is not an official announcement.

Moody II shares have continued to drop in value. According to an update provided by the REIT on June 6, 2024. the REIT reported a decline in Net Asset Value (“NAV”) per share from $19.45 as of December 31, 2022, to $17.25 as of December 31, 2023. However, publicly traded REITs typically trade at a discount to NAV, meaning a they are bought and sold at a lower price, and non-traded REITs like Moody II often can be sold only at prices far below NAV, if at all. Moody II shares have reportedly traded at prices as low as $9.00 a share in private transactions. Shares were originally sold to investors at a price of $25/share.

Concerningly, Moody II also announced that it will be impacted by debt maturities in 2024 because of anticipated increases in interest rates of approximately 300 to 500 basis points on the debts that have to be refinanced. Approximately 38% of the REIT’s $228 million in outstanding indebtedness, as of March 31, 2024, is reportedly scheduled to mature in 2024. Moody II also announced earlier this year that it was unable to file its Annual Report on Form 10-K for the period ended December 31, 2023 with the U.S. Securities and Exchange Commission by the prescribed filing deadline (April 1, 2024) without unreasonable effort or expense because the Company’s independent auditors, require additional time to complete an audit.

Moody II previously suspended distributions and its share repurchase program in April 2020 at the onset of the COVID-19 pandemic. The REIT reportedly owns a portfolio of 15 hotels and reported total assets of $412 million as of early 2024, with total liabilities of $304 million.

Non-traded REITs pose many risks that are often not readily apparent to retail investors, or adequately explained by the financial advisors and stockbrokers who recommend these complex investments. One significant risk associated with non-traded REITs has to do with their high up-front commissions, typically between 7-10%. In addition to high commissions, non-traded REITs like Moody II generally charge investors for certain due diligence and administrative fees, ranging anywhere from 1-3%.

Furthermore, non-traded REITs are generally illiquid investments. Unlike traditional stocks and mutual funds, non-traded REITs do not trade on a national securities exchange. Many uninitiated investors in non-traded REITs have come to learn too late that their ability to exit their investment position is limited. Typically, investors in non-traded REITs can only exit their investment through redemption directly with the sponsor on a limited basis, and often at a disadvantageous price, or through sales in a limited secondary market as discussed above.

Investors who wish to discuss a possible claim may contact a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation. The firm has handled numerous cases against financial advisors who allegedly made misleading or unsuitable recommendations of alternative investments. Attorneys at the firm are admitted in New York, Wisconsin and various federal courts around the country, and handle cases nationwide (in cooperation with attorneys located in those states if required by applicable rules).

THIS ARTICLE IS INTENDED AS ATTORNEY ADVERTISING AND IS NOT AN OFFICIAL ANNOUNCEMENT

HJ Sims has reportedly offered to investors a number of private placement investments that the firm itself structures and establishes. These so called Regulation D private or “Reg D” private placement offerings sold by HJ Sims have reportedly totaled about $2.2B billion in principal value sold. Reportedly HJ Sims sold 84 separate private placements. Some of the private placements sold by HJ Sims are the following:

• Fountains Acquisition Finance
• Fox Ridge Finance
• Orchard View, Acquisition
• DRSN Real Estate GP
• Elderwood Acquisition
• Heatherwood Acquisition
• Sims Merrill Gardens III
• Stuart Lodge Living/Stuart Lodge Properties
• Discovery Funding Sarasota Bay
• Athena Acquisition VI
• Epic Finance I
• Carmel Acquisition
• Treeo Funding I
• Fountains of Hope
• Tuscan Isle Property Company
• Tuscan Gardens of Venetia Bay Properties
• Gryphon BH Funding
• HJSI Athena Portfolio Finance
• Tuscan Isle ChampionsGate Prop. Co.
• Affinity Portfolio Funding
• Affinity Portfolio Funding II
• Affinity Portfolio Funding III
• Affinity Development Funding I
• BHCP Acquisition
• Vantage Point Funding I
• Sante Funding I
• Tuscan Gardens of Palm Coast Properties
• Vita Funding I
• LW Development Funding I
• Affinity Funding IV
• NHG Funding I
• Affinity Portfolio Funding V
• Affinity Portfolio Funding VI
• Monarch Funding I
• Sims Benchmark V
• TL Funding I
• Sims Merrill Gardens V
• Stonebridge Funding I
• NHG Funding II
• Riverview ALF Holdings
• Civitas Funding I
• Inspirit Venue Funding I
• Sims High Income Portfolio
• NHG Funding III
• Monarch Funding II
• Monarch Funding III
• Monarch Funding IV
• DRSN Real Estate GP
• TL Funding II
• NREA Southeast Portfolio Three
• Links Funding I
• Family Health Funding I
• Sims Benchmark VI
• NREA Retreat, DST
• Sims Merrill Gardens VI
• Griffin Capital (South Beach – Vegas) DST
• TL Funding III
• TL Funding IV
• Caraday Funding I
• Crown Point Funding I
• Magnolia Funding I
• Voralto Funding I
• Links Funding II
• ALG Funding IX
• Watermark FL Funding
• SAL Funding I
• Commercial Equipment Finance Income Fund
• Elevate Funding I
• Vinebrook Homes Trust
• Parliament Credit Opportunities Fund
• Comprehensive Care Funding I
• PPG Funding I
• PPG Funding II
• Hill Valley Funding I
• Links Funding III
• NexPoint Buffalo DST
• NexPoint Hughes DST
• HBS Acquisition Finance
• Mackenzie Preferred Funding
• Cleveland Thermal
• Sims Cathcart Funding
• Cypress Point Funding
• Riverchase Funding
• Gryphon Finance I
• Madison Funding I
• Tuscan Isle Holdings I
• Tuscan Isle Championsgate Holdings
• Hawkeye Village Finance I
• Meridian Portfolio Funding I
• Poet’s Walk Funding I
• Wakefield Portfolio Funding I
• HJSI Athena Portfolio Finance

Private placements are investments that are not publicly registered with the Securities and Exchange Commission that are offered via various exemptions from registration that permit the sales. Sales of certain private placements including those offered under an exemption known as “Regulation D” are largely limited to sales to “accredited investors” who meet certain eligibility criteria established by the Securities and Exchange Commission (SEC). For example, an investor would be accredited if they had a net worth over $1 million, excluding primary residence (individually or with spouse or partner) or income over $200,000 (individually) or $300,000 (with spouse or partner) in each of the prior two years, and reasonably expects the same for the current year. Investors can also be deemed accredited based upon professional experience.

Private placements are generally speculative and illiquid, in comparison to publicly traded securities such as common stocks listed on exchanges or mutual funds. However, private placements have been popular with certain independent broker-dealer firms because private placement investments generally carry commissions many times higher than publicly traded securities. Many private placements may carry commissions and other upfront costs ranging from 7% to 12% in total fees, costs, due diligence fees, and selling commissions to the brokerage firm.

As members and associated persons of FINRA, brokerage firms and their financial advisors must ensure that adequate due diligence is performed on any investment that is recommended to investors- including private placements under Regulation D. Further, firms and their brokers must ensure that investors are informed of the risks associated with an investment, and must conduct a suitability analysis to determine if an investment meets an investor’s stated investment objectives and risk profile. Either an unsuitable recommendation to purchase an investment or a misrepresentation concerning the nature and characteristics of the investment may give rise to a claim against a stockbroker or financial advisor.

Investors who wish to discuss a possible claim may contact a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation. Attorneys at the firm are admitted in New York, Wisconsin and various federal courts around the country, and handle cases nationwide (in cooperation with attorneys located in those states if required by applicable rules). THIS ARTICLE IS INTENDED AS ATTORNEY ADVERTISING AND IS NOT AN OFFICIAL LEGAL ANNOUNCEMENT.

Sila is a net lease real estate investment trust with a focus on healthcare assets. Sila recently reported that it has received approval to list its common stock on the New York Stock Exchange with trading expected to commence on the NYSE on June 13, 2024, under the ticker symbol “SILA.”

Sila merged with another REIT known as with Carter Validus Mission Critical REIT Inc. in late 2019. As of 2021, Sila reportedly owned 153 real estate properties, consisting of 29 data centers and 124 healthcare properties located in 70 markets across the United States with a total purchase price of approximately $3.2 billion, including capital expenditures on development properties placed into service. Sila was incorporated on January 11, 2013 as a Maryland corporation that elected to be taxed as a real estate investment trust (REIT).

As a publicly registered non-traded REIT, Sila was permitted to sell securities to the investing public at large, including numerous unsophisticated retail investors who bought shares upon the recommendation of a broker or money manager. Sila began offering securities in May 2014, and after raising $1.2 billion in investor equity in its initial primary offering, launched a follow-on offering that terminated in November 2018 after raising an additional $86.9 million.

In connection with listing on the NYSE, Sila reportedly intends to commence a $50 million modified “Dutch auction” tender offer, which has the potential to provide liquidity for investors. The price range for the tender offer will be announced at the launch of the tender offer, which is expected to occur on the same day as the listing on the NYSE.

Non-traded REITs are generally illiquid investments. Unlike traditional stocks and mutual funds, non-traded REITs do not trade on a national securities exchange. Many uninitiated investors in non-traded REITs have come to learn too late that their ability to exit their investment position is limited. Typically, investors in non-traded REITs can only exit their investment through redemption directly with the sponsor on a limited basis, and often at a disadvantageous price, or through sales in a limited secondary market.

But now that Sila has been approved for listing on NYSE, investors will finally be able to sell their shares in a liquid market. However, past history of direct listings on non-traded REITs on stock exchanges suggests that the REIT’s shares will likely trade at a substantial discount to their net asset value or “NAV”, which was reported by the Company as $7.48 a share as of December 2023. However this NAV refers to the value of Sila shares prior to a one-for-four reverse split of shares that occurred on May 1, 2024. After the split, investors will now hold one-quarter of the shares that they previously held, and will have to divide the share price in trading on the NYSE by four in order to assess whether they have gained or lost money on their shares relative to their purchase price.

Investors who wish to discuss a possible claim concerning Sila or another alternative investment may contact a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation. Attorneys at the firm are admitted in New York, Wisconsin and various federal courts around the country, and handle cases nationwide (in cooperation with attorneys located in those states if required by applicable rules). This article is intended as ATTORNEY ADVERTISING and is not an official announcement.

AHR, a non-traded real estate investment trust formed by the 2021 merger of Griffin-American Healthcare REIT III, Griffin-American Healthcare REIT IV, and American Healthcare Investors, is reportedly seeking to raise about $700 million in an initial public offering of its shares, as reported by Bloomberg. If the plan moves forward, AHR would sell newly issued shares to the public and its existing shares would also later become tradeable on the New York stock Exchange under the ticker symbol “AHR”.

AHR acquires, owns, and operates a portfolio of properties such as medical office buildings, senior housing, skilled nursing facilities and hospitals, according to public filings with the Securities and Exchange Commission. It reportedly owns nearly 300 properties in states including Indiana, Michigan, Missouri, Ohio and Texas, and values its assets at about $4.6 billion as of Sept. 30, 2023.

Previously, on January 11, 2023, AHR issued a statement in response to a third-party tender offer from an investor known as Comrit seeking to purchase up to 228,136 shares of the REIT at a 58% discount to its most recently estimated NAV per share. The tender offer was for $13.15 a share, which is far lower than then AHR’s estimated NAV per share of $31.30 a share. AHR’s board made no recommendation to shareholders to accept or reject the Comrit tender offer, despite the fact that the price offered is far below the REIT’s estimated NAV.

AHR shares underwent a one-for-four reverse split back in November 2022. AHR shareholders have experienced other setbacks including reduced distributions and the suspension of redemptions. On March 15, 2023, AHR’s board of directors authorized a reduced quarterly distribution from $0.40 per share to $0.25 per share, citing the need to preserve liquidity to help the company “achieve its long-term strategic goals.” AHR also suspended repurchases or redemptions from investors in November 22, leaving investors with limited options to sell their shares of the REIT should they wish to do so.

Non-traded REITs pose many risks that are often not readily apparent to retail investors, or adequately explained by the financial advisors and stockbrokers who recommend these complex investments. One significant risk associated with non-traded REITs has to do with their high up-front commissions, typically between 7-10%. In addition to high commissions, non-traded REITs generally charge investors for certain due diligence and administrative fees, ranging anywhere from 1-3%.

Furthermore, non-traded REITs are generally illiquid investments. Unlike traditional stocks and mutual funds, non-traded REITs do not trade on a national securities exchange. Many uninitiated investors in non-traded REITs have come to learn too late that their ability to exit their investment position is limited. Typically, investors in non-traded REITs can only exit their investment through redemption directly with the sponsor on a limited basis, and often at a disadvantageous price, or through sales in a limited secondary market.

Stockbrokers and financial advisors who sell non-traded REITs and other non-conventional investments have an obligation to recommend these investments only when they have a reasonable basis to recommend them to an individual customer. Advisors also may not sell non-traded REITs or other investments via a misleading sales presentation that omits to disclose material risks.

Investors with questions about claims against a stockbroker or investment advisor concerning AHR or other non-traded REITs or non-conventional investments may contact Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation. Attorneys at the firm are admitted in New York, Wisconsin and various federal courts around the country, and handle cases nationwide (in cooperation with attorneys located in those states if required by applicable rules).

THIS ARTICLE IS INTENDED AS ATTORNEY ADVERTISING AND IS NOT AN OFFICIAL ANNOUNCEMENT

When it was established in 2018, Lodging Fund III offered $100 million in common stock to investors, reportedly raising $75.3 million in proceeds from sales of stock as of the last quarter of 2020, Lodging Fund REIT III is a Maryland corporation and focuses on holding a diversified portfolio of select service, limited service and extended stay hotels located in the heartland of America. According to a filing with the Securities and Exchange Commission (“SEC”) by Lodging Fund III, the non-traded REIT has a diversified portfolio that includes “limited service, select service, and extended stay hospitality properties” in the geographic area stretching from the Rockies to the Appalachian Mountains and from Texas to North Dakota.

In a filing with the SEC in late 2023, Lodging Fund III reported that its board of directors had both dismissed Deloitte & Touche LLP (Deloitte) and appointed Marcum LLP to serve as its independent public accounting firm as of October 24, 2023. Deloitte had served as the REIT’s audit firm for 2020 and 2021 and provided clean audit opinions of the REIT’s financial statements in each year. Concurrent with its dismissal, Deloitte filed a letter with the SEC stating that it had no disagreements with the REIT related to its financial statements, disclosures, practices, or accounting principles.

Despite these facts, Lodging Fund III has not filed quarterly reports with the SEC since the second quarter of 2022, despite being required to do so under federal law, nor has it filed its annual report for the year ending 2022. The REIT has reported that uncertainties related to an SEC investigation disclosed on September 23, 2022, have led to delays in filing its quarterly and annual reports. Lodging Fund III had previously reported that in December 2020, it had received notice that the SEC is conducting an inquiry into the company’s reimbursement of certain expenses to its external advisor.

On September 12, 2022, the company reportedly received a Wells notice from the SEC staff, indicating that the SEC has made a preliminary determination to bring an enforcement action against LF REIT III’s advisor for possible violations of securities laws. Corey Maple, the CEO of the REIT, has also received a Wells notice as part of this same investigation.

On August 28, 2023, the SEC announced it had settled charges against the REIT’s advisor, and its principal Corey Maple “for their roles in directing two REITs to reimburse overhead expenses in a manner that was inconsistent with disclosures made to investors.” The SEC order finds that “from 2014 to 2020, the Respondents improperly directed Lodging Opportunity Fund Real Estate Investment Trust and Lodging Fund REIT III, Inc., (collectively the Funds) to reimburse approximately $5 million of overhead expenses.” The SEC’s order also noted that Legendary Capital entities and Mr. Maple represented that certain sponsoring entities would be responsible for the overhead expenses from managing the Funds, including payroll and office rent, and that the Funds would not be responsible for such overhead expenses. The parties later settled the SEC case on the terms accessible here: lodging fund iii settlement Non-traded REITs pose many risks that are often not readily apparent to retail investors, or adequately explained by the financial advisors and stockbrokers who recommend these complex investments. One significant risk associated with non-traded REITs has to do with their high up-front commissions, typically between 7-10%. In addition to high commissions, non-traded REITs generally charge investors for certain due diligence and administrative fees, ranging anywhere from 1-3%.

Furthermore, non-traded REITs are generally illiquid investments. Unlike traditional stocks and mutual funds, non-traded REITs do not trade on a national securities exchange. Many uninitiated investors in non-traded REITs have come to learn too late that their ability to exit their investment position is limited. Typically, investors in non-traded REITs can only exit their investment through redemption directly with the sponsor on a limited basis, and often at a disadvantageous price, or through sales in a limited secondary market.

Stockbrokers and financial advisors who sell non-traded REITs and other non-conventional investments have an obligation to recommend these investments only when they have a reasonable basis to recommend them to an individual customer. Advisors also may not sell non-traded REITs or other investments via a misleading sales presentation that omits to disclose material risks.

Investors with questions about claims against a stockbroker or investment advisor concerning Lodging Fund III or other non-traded REITs or non-conventional investments may contact Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation. Attorneys at the firm are admitted in New York, Wisconsin and various federal courts around the country, and handle cases nationwide (in cooperation with attorneys located in those states if required by applicable rules).

THIS ARTICLE IS INTENDED AS ATTORNEY ADVERTISING AND IS NOT AN OFFICIAL ANNOUNCEMENT

CIM REIT, originally sold as Cole Credit Property Trust IV, originally sold shares to the public for $10 each. Since then, the price of the REIT shares has decreased, reaching an estimated net asset value (NAV) per share of $7.77 as of December 31, 2019 and declining even further at later dates.

Now, an Israel-based investment fund, has made a filing with the Securities and Exchange Commission (“SEC”) to launch an unsolicited tender offer to purchase shares of CIM REIT a publicly registered non-traded real estate investment trust. The fund previously made a filing with the SEC in April 2023 to launch an unsolicited tender offer. The previous offer included the purchase of up to 22 million shares of CIM Real Estate Finance Trust Inc. for $4.57 per share. The fund’s current offer is to purchase up to 22 million shares of common stock at a an even lower purchase price equal to $4.21 per share.

These figures align with reported secondary market prices of around $4.20 a share for CIM REIT, although the REIT’s stated net asset value per share is $6.57.

Non-traded REITs pose many risks that are often not readily apparent to retail investors, or adequately explained by the financial advisors and stockbrokers who recommend these complex investments. One significant risk associated with non-traded REITs has to do with their high up-front commissions, typically between 7-10%. In addition to high commissions, non-traded REITs generally charge investors for certain due diligence and administrative fees, ranging anywhere from 1-3%.

Furthermore, non-traded REITs are generally illiquid investments. Unlike traditional stocks and mutual funds, non-traded REITs do not trade on a national securities exchange. Many uninitiated investors in non-traded REITs have come to learn too late that their ability to exit their investment position is limited. Typically, investors in non-traded REITs can only exit their investment through redemption directly with the sponsor on a limited basis, and often at a disadvantageous price, or through sales in a limited secondary market. As in this case, third party tender offers may also offer liquidity, but at a price that may or may not reflect the shares’ fair value.

Stockbrokers and financial advisors who sell non-traded REITs and other non-conventional investments have an obligation to recommend these investments only when they have a reasonable basis to recommend them to an individual customer. Advisors also may not sell non-traded REITs or other investments via a misleading sales presentation that omits to disclose material risks.

Investors with questions about claims against a stockbroker or investment advisor concerning CIM REIT or other non-traded REITs or non-conventional investments may contact Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation. Attorneys at the firm are admitted in New York, Wisconsin and various federal courts around the country, and handle cases nationwide (in cooperation with attorneys located in those states if required by applicable rules).

Lightstone IV, formerly known as Lightstone Real Estate Income Trust, Inc., changed names on September 15, 2021. Lightstone IV, a public, non-traded REIT, reportedly focuses on investing in debt obligations that finance development or redevelopment opportunities, originate mezzanine loans or preferred equity investments in development projects, and participates in loan portfolios with third parties.

According to data from secondary sales websites, shares of the REIT have been listed for sale at prices between $3.40 and $4.00 a share. Shares were originally sold for $10 per share. According to filings on March 18, 2022, the board of directors approved an estimated value per share of $8.58 per share based on assets less the estimated value of liabilities divided by the number of shares outstanding.

According to its website, Lightstone has offered investors “the opportunity to invest in a diversified portfolio of real estate through its various public non-traded REIT offerings.”

On March 25, 2020, the Lightstone’s Board of Directors determined to suspend regular monthly distributions for months ending after March 2020, according to filings with the SEC, citing market volatility due to the Coronavirus pandemic.

Non-traded REITs pose many risks that are often not readily apparent to retail investors, or adequately explained by the financial advisors and stockbrokers who recommend these complex investments. One significant risk associated with non-traded REITs has to do with their high up-front commissions, typically between 7-10%. In addition to high commissions, non-traded REITs generally charge investors for certain due diligence and administrative fees, ranging anywhere from 1-3%.

Furthermore, non-traded REITs are generally illiquid investments. Unlike traditional stocks and mutual funds, non-traded REITs do not trade on a national securities exchange. Many uninitiated investors in non-traded REITs have come to learn too late that their ability to exit their investment position is limited. Typically, investors in non-traded REITs can only exit their investment through redemption directly with the sponsor on a limited basis, and often at a disadvantageous price, or through sales in a limited secondary market. As in this case, third party tender offers may also offer liquidity, but at a price that may or may not reflect the shares’ fair value.

Stockbrokers and financial advisors who sell non-traded REITs and other non-conventional investments have an obligation to recommend these investments only when they have a reasonable basis to recommend them to an individual customer. Advisors also may not sell non-traded REITs or other investments via a misleading sales presentation that omits to disclose material risks.

Investors with questions about claims against a stockbroker or investment advisor concerning Lightstone IV or other non-traded REITs or non-conventional investments may contact Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation. Attorneys at the firm are admitted in New York, Wisconsin and various federal courts around the country, and handle cases nationwide (in cooperation with attorneys located in those states if required by applicable rules).

Sila REIT, a non-traded, publicly registered REIT, invests in data centers and healthcare facilities, according to its website. The company changed its name from Carter Validus Mission Critical REIT II to Sila on September 30, 2020.

In June, 2023, Sila announced that GenesisCare USA Inc., one of the REIT’s tenants, filed for Chapter 11 bankruptcy protection. GenesisCare’s lease obligations with Sila have reportedly not been included in any motions GenesisCare has filed, and Sila reports that GenesisCare has met its lease payment obligations due to the company through May 2023.

On March 6, 2023, Sila REIT’s board recommended in a Letter to Stockholders that they reject an unsolicited tender offer by a private equity fund that had offered to purchase up to 500,000 Class A shares for $4.16 each, close to 50 percent less than the REIT’s then most recent net asset value (NAV) per share of $8.22. Secondary market bid and offer information suggests shares of Sila Realty Trust have recently been sold for around $5.20 per share. Shares were originally offered for $10 per share, meaning investors may have lost a substantial portion of their principal.

Non-traded REITs pose many risks that are often not readily apparent to retail investors, or adequately explained by the financial advisors and stockbrokers who recommend these complex investments. One significant risk associated with non-traded REITs has to do with their high up-front commissions, typically between 7-10%. In addition to high commissions, non-traded REITs generally charge investors for certain due diligence and administrative fees, ranging anywhere from 1-3%.

Furthermore, non-traded REITs are generally illiquid investments. Unlike traditional stocks and mutual funds, non-traded REITs do not trade on a national securities exchange. Many uninitiated investors in non-traded REITs have come to learn too late that their ability to exit their investment position is limited. Typically, investors in non-traded REITs can only exit their investment through redemption directly with the sponsor on a limited basis, and often at a disadvantageous price, or through sales in a limited secondary market. As in this case, third party tender offers may also offer liquidity, but at a price that may or may not reflect the shares’ fair value.

Stockbrokers and financial advisors who sell non-traded REITs and other non-conventional investments have an obligation to recommend these investments only when they have a reasonable basis to recommend them to an individual customer. Advisors also may not sell non-traded REITs or other investments via a misleading sales presentation that omits to disclose material risks.

Investors with questions about claims against a stockbroker or investment advisor concerning Sila REIT or other non-traded REITs or non-conventional investments may contact Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation. Attorneys at the firm are admitted in New York, Wisconsin and various federal courts around the country, and handle cases nationwide (in cooperation with attorneys located in those states if required by applicable rules).

In August 2023, an Israel-based investment fund has reportedly extended an offer to purchase up to 675,000 shares of Class A common stock and up to 25,000 shares of Class T common stock of the company at a price of $10.86 per share. Moody REIT II officially estimated that its net asset value (NAV) per share is $19.45 as of December 31, 2022. In October 2023, another tender offer for $11.57 a share was announced.

Shares of Moody REIT II were originally offered to public investors by brokers for $25 per share, but shares have reportedly sold in 2023 for as low as $6.60 per share in the limited secondary market. In April 2020, Moody REIT II reportedly terminated its IPO and suspended its offering, distributions, and share repurchase program. By anyone’s calculation, it appears that investors in Moody REIT II have incurred losses of principal.

Moody REIT II, a non-traded REIT, has a portfolio of 15 hotels. Its sponsor, Moody National Companies is a full-service commercial real estate firm that describes itself as focused on “investment opportunities that offer long-term asset preservation as well as stable and predictable cash flows”. .

Non-traded REITs pose many risks that are often not readily apparent to retail investors, or adequately explained by the financial advisors and stockbrokers who recommend these complex investments. One significant risk associated with non-traded REITs has to do with their high up-front commissions, typically between 7-10%. In addition to high commissions, non-traded REITs generally charge investors for certain due diligence and administrative fees, ranging anywhere from 1-3%.

Furthermore, non-traded REITs are generally illiquid investments. Unlike traditional stocks and mutual funds, non-traded REITs do not trade on a national securities exchange. Many uninitiated investors in non-traded REITs have come to learn too late that their ability to exit their investment position is limited. Typically, investors in non-traded REITs can only exit their investment through redemption directly with the sponsor on a limited basis, and often at a disadvantageous price, or through sales in a limited secondary market. As in this case, third party tender offers may also offer liquidity, but at a price that may or may not reflect the shares’ fair value.

Stockbrokers and financial advisors who sell non-traded REITs and other non-conventional investments have an obligation to recommend these investments only when they have a reasonable basis to recommend them to an individual customer. Advisors also may not sell non-traded REITs or other investments via a misleading sales presentation that omits to disclose material risks.

Investors with questions about claims against a stockbroker or investment advisor concerning Moody REIT II or other non-traded REITs or non-conventional investments may contact Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation. Attorneys at the firm are admitted in New York, Wisconsin and various federal courts around the country, and handle cases nationwide (in cooperation with attorneys located in those states if required by applicable rules).

Silver Star announced earlier this month that Hartman SPE LLC, an indirect subsidiary that owns legacy office, retail and industrial properties, filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code.

The bankruptcy filing comes after what Silver Star calls “failed efforts” to negotiate with Hartman vREIT XXI Inc. which is under the control of Allen Hartman. Allen Hartman was recently named interim chief financial officer of Hartman vREIT XXI.

In March 2023, the executive committee of Silver Star’s board removed Allen Hartman, founder, as executive chairman of the company. In May 2023, Silver Star announced that their recently appointed chief executive officer, Mark Torok, had resigned. Silver Star, in the aggregate, has reportedly sold eight assets in 2023 for net proceeds over $108 million, which includes four assets sold by the SPE for net proceeds of $44 million.

In June 2023, Silver Star issued a warning regarding its ability to continue as a going concern due to questions concerning Silver Star’s ability to refinance its debts.

Silver Star, a publicly registered non-traded real estate investment trust, reportedly owned 44 commercial properties comprising approximately 6.8 million square feet plus four pad sites and two land developments, all located in Texas, as of September 30, 2022. Silver Star suspended its share redemption plan in July 2022 to “support the long-term fiscal health” of the REIT.

Stockbrokers and financial advisors who sell non-traded REITs and other non-conventional investments have an obligation to recommend these investments only when they have a reasonable basis to recommend them to an individual customer. Advisors also may not sell non-traded REITs or other investments via a misleading sales presentation that omits to disclose material risks. A hallmark of non-traded REITs is their high up-front commissions, typically between 7-10%, which many investors may overlook at the time of purchase, and which may motivate financial advisors to recommend non-traded REITs instead of lower-commission alternatives such as publicly traded REITs and ETFs.

Silver Star’s estimated net asset value (NAV) per share has dropped as the foregoing issues have emerged, suggesting that investors in the REIT have incurred losses. The REIT’s estimated NAV per share was $12.08 in 2021, but was revised downward to $6.25 in 2022. Shares were originally sold to investors at $10.00 a share. The shares are not listed on a stock exchange and investors have limited options to sell shares in the secondary market.

Investors with questions about claims against a stockbroker or investment advisor concerning Silver Star or other non-traded REITs or non-conventional investments may contact Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation. Attorneys at the firm are admitted in New York, Wisconsin and various federal courts around the country, and handle cases nationwide (in cooperation with attorneys located in those states if required by applicable rules).

Shares in the American Healthcare REIT were recently the subject of a mini tender offer to purchase Class T and Class I common sharers of the REIT for $8.50 per share, which equates to $2.13 a share after accounting for the November 2022 four-for-one reverse stock split in AHR shares. AHR’s Board of Directors announced it was neutral concerning these unsolicited offers.

Despite this neutrality, the tender offer is for a per share consideration far below AHR’s published estimated net asset value (NAV) per share of $31.40 as of December 31, 2022.

AHR was formed after a merger of Griffin-American Healthcare REIT III, Inc. and Griffin-American Healthcare REIT IV, Inc. in a merger that also involved the acquisition of the REITs’ sponsor and advisor, American Healthcare Investors LLC.

AHR reportedly has a 19.1 million-square-foot portfolio of 300 medical office buildings, skilled nursing facilities and integrated senior health campuses located in 36 states, the United Kingdom and the Isle of Man, in addition to a real estate-related investment. The gross investment value of the portfolio is reported to be approximately $4.4 billion. AHR filed a Form S-11 with the U.S. Securities and Exchange Commission (SEC) back in September 2022 announcing a plan to undertake an underwritten public offering of the REIT’s shares as well as a listing of AHR’s common stock on the New York Stock Exchange.

Non-traded REITs pose many risks that are often not readily apparent to retail investors, or adequately explained by the financial advisors and stockbrokers who recommend these complex investments. One significant risk associated with non-traded REITs has to do with their high up-front commissions, typically between 7-10%. In addition to high commissions, non-traded REITs generally charge investors for certain due diligence and administrative fees, ranging anywhere from 1-3%.

Furthermore, non-traded REITs are generally illiquid investments. Unlike traditional stocks and mutual funds, non-traded REITs do not trade on a national securities exchange. Many uninitiated investors in non-traded REITs have come to learn too late that their ability to exit their investment position is limited. Typically, investors in non-traded REITs can only exit their investment through redemption directly with the sponsor on a limited basis, and often at a disadvantageous price, or through sales in a limited secondary market. As in this case, third party tender offers may also offer liquidity, but at a price that may or may not reflect the shares’ fair value.

Stockbrokers and financial advisors who sell non-traded REITs and other non-conventional investments have an obligation to recommend these investments only when they have a reasonable basis to recommend them to an individual customer. Advisors also may not sell non-traded REITs or other investments via a misleading sales presentation that omits to disclose material risks.

Investors with questions about claims against a stockbroker or investment advisor concerning AHR or other non-traded REITs or non-conventional investments may contact Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation. Attorneys at the firm are admitted in New York, Wisconsin and various federal courts around the country, and handle cases nationwide (in cooperation with attorneys located in those states if required by applicable rules).

According to an online publication, the U.S. Securities and Exchange Commission (“SEC”) has reportedly initiated an investigation regarding Silver Star, as disclosed by a letter the company reportedly received from the SEC. The SEC reportedly has inquired about Silver Star’s removal of Allen Hartman, former executive chairman of the company, as well as Silver Star’s reported investigation into “certain violations of fiduciary and other duties to Silver Star by Hartman.” The SEC also has reportedly inquired about the recent resignation of Mark Torok as chief executive officer of Silver Star. Torok resigned in May, less than a month after reaching a long-term employment agreement with Silver Star’s the board of directors. Silver Star has previously stated in SEC filings that it had material weaknesses in controls over the review, approval and disclosure of related party transactions and the insufficient design of controls relating to the timing of revenue recognition of estimated recoveries of operating expense items under leasing agreements.

Previously, in June 2023, Silver Star issued a warning regarding its ability to continue as a going concern due to questions concerning Silver Star’s ability to refinance its debts. In March 2023, the executive committee of Silver Star’s board removed Allen Hartman, founder, as executive chairman of the company.

Silver Star, a publicly registered non-traded real estate investment trust, reportedly owned 44 commercial properties comprising approximately 6.8 million square feet plus four pad sites and two land developments, all located in Texas, as of September 30, 2022. Silver Star suspended its share redemption plan in July 2022 to “support the long-term fiscal health” of the REIT.

Stockbrokers and financial advisors who sell non-traded REITs and other non-conventional investments have an obligation to recommend these investments only when they have a reasonable basis to recommend them to an individual customer. Advisors also may not sell non-traded REITs or other investments via a misleading sales presentation that omits to disclose material risks. A hallmark of non-traded REITs is their high up-front commissions, typically between 7-10%, which many investors may overlook at the time of purchase, and which may motivate financial advisors to recommend non-traded REITs instead of lower-commission alternatives such as publicly traded REITs and ETFs.

Silver Star’s estimated net asset value (NAV) per share has dropped as the foregoing issues have emerged, suggesting that investors in the REIT have incurred losses. The REIT’s estimated NAV per share was $12.08 in 2021, but was revised downward to $6.25 in 2022. Shares were originally sold to investors at $10.00 a share. The shares are not listed on a stock exchange and investors have limited options to sell shares in the secondary market.

Investors with questions about claims against a stockbroker or investment advisor concerning Silver Star or other non-traded REITs or non-conventional investments may contact Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation. Attorneys at the firm are admitted in New York, Wisconsin and various federal courts around the country, and handle cases nationwide (in cooperation with attorneys located in those states if required by applicable rules).

Necessity REIT listed its shares on Nasdaq Global Select Market (“Nasdaq”) under the ticker symbol “AFIN” effective July 19, 2018. The Company later changed its name to The Necessity Retail REIT and adopted the ticker symbol “RTL” in February 2022. Before listing its shares on Nasdaq, Necessity REIT (then known as American Finance Trust) published an “estimated per share” net asset value of $23.56 in June 2018- leaving investors surprised when the REIT’s shares plummeted in value after being listed on Nasdaq only a month later in July 2018. The REIT’s shares have continued to languish, and as of January 2023, Necessity REIT shares were trading at below $7.00 a share- meaning that investors who bought shares in the initial offering would have lost well over half of their initial investment.

More recently, an investor in Necessity REIT known as Blackwells Capital, LLC (“Blackwells”) has called for corporate governance changes and new directors for the REIT. According to a recent news article, Blackwells reportedly notes that Necessity REIT trades at a 68.5% discount to its net asset value or “NAV” which, according to Blackwells, represents poor performance relative to comparable REITs. Blackwells reportedly filed a lawsuit against Necessity REIT in December, 2022, challenging Necessity REIT’s interpretation of the meaning of a July 2022 bylaw amendment concerning the appointment of directors to the REIT’s board. Blackwells has nominated two candidates for the Necessity REIT’s board, who have been rejected by the REIT, precipitating the lawsuit.

Initially offered as a non-traded REIT, Necessity REIT’s offering raised more than $1.6 billion in investor equity. Stockbrokers and financial advisors who sell non-traded REITs and other non-conventional investments have an obligation to recommend these investments only when they have a reasonable basis to recommend them to an individual customer. Advisors also may not sell non-traded REITs or other investments via a misleading sales presentation that omits to disclose material risks. A hallmark of non-traded REITs is their high up-front commissions, typically between 7-10%, which many investors may overlook at the time of purchase, and which may motivate financial advisors to recommend non-traded REITs instead of lower-commission alternatives such as publicly-traded REITs and ETFs.

As of Sept. 30, 2022, Necessity REIT reportedly owned 1,050 properties, comprised of 28.8 million rentable square feet, which were 92.6% leased, including 939 single-tenant net leased commercial properties, 900 of which are retail properties, and 111 multi-tenant retail properties.

Investors with questions about claims against a stockbroker or investment advisor concerning Necessity REIT or other non-traded REITs or non-conventional investments may contact Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation. Attorneys at the firm are admitted in New York, Wisconsin and various federal courts around the country, and handle cases nationwide (in cooperation with attorneys located in those states if required by applicable rules).

In January, 2023, the Securities and Exchange Commission (“SEC”) charged Liddle with allegedly defrauding at least 13 investment advisory clients of approximately $1.9 million. The SEC’s complaint alleges that Liddle, while acting as an investment advisor, made misrepresentations to clients, many of whom were seniors. Liddle purportedly directed some investment advisory clients to send money directly to his investment advisory company, where Liddle allegedly misappropriated client funds and never invested the money on his clients’ behalf. The SEC’s complaint is accessible here. LiddleSECComplaint

Earlier, in June 2022, the Financial Industry Regulatory Authority (FINRA) barred Liddle (CRD#: 5478479) from associating with any FINRA member at any time after Liddle reportedly refused to provided information in its investigation to reports that Liddle allegedly borrowed more than $1.8 million from at least 13 of his customers while he was associated with his member firm, according to FINRA. The FINRA bar is accessible here. LiddleAWC

According to his broker report, Liddle was reportedly affiliated with Landolt Securities in Oshkosh, Wisconsin from April, 2020 to May, 2022, and previously was a representative of Western International Securities from 2012 until April 2020.

The SEC says that between at least June 2019 and May 2022, Liddle lied to investment clients by claiming their portfolios had become less safe in the wake of COVID-19’s impact on the market. Liddle then advised these clients to sell some securities to reinvest the proceeds, but after selling the securities, Liddle placed the proceeds in a bank account that he used for personal expenses. Liddle is accused of violating federal statutes including the Securities Act, the Securities Exchange Act and the Investment Advisers Act.

The State of Wisconsin Division of Securities also barred Liddle, after charging him with deceiving these same 13 investors, from whom Liddle allegedly collected a total of over $1.8 million under false pretenses. Ten of these thirteen victims were senior citizens over the age of 65. Liddle did not contest these charges but instead waived his right to a hearing and agreed to being barred from the securities industry. Documents summarizing the State of Wisconsin charges are accessible here. liddle barred

Investors who lose money as a result of stockbroker or investment advisor fraud may be able to recover fund through a process known as arbitration. Investors who wish to discuss a possible claim may contact a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation. Attorneys at the firm are admitted in New York, Wisconsin and various federal courts around the country, and handle cases nationwide (in cooperation with attorneys located in those states if required by applicable rules).

The Lightstone REITs were sold to the public during various periods dating back to 2006 (Lightstone I), 2009 (Lightstone II), and 2014 (Lightstone III), respectively. Despite the passage of years- over fifteen years in the case of Lightstone I- none of the three Lightstone REITs has been listed on a public exchange or otherwise become liquid.

Recently, the Lightstone REITs solicited proxies seeking shareholder approval for key charter amendments including:

* Eliminating durational provisions that require the Lightstone REITs seek a listing on a national stock exchange by their respective 8th or 10th (in the case of Lightstone II) anniversaries of the termination of their respective public offerings, or otherwise seek liquidity;

* Eliminating fiduciary duties that the boards owe to the Lightstone REITs and shareholders and the directors’ fiduciary duties to supervise the relationships of the Lightstone REITs and their external advisors;

* Eliminating certain protections in the event of a “roll-up” transaction; and

* Eliminating quorum requirements of at least 50% of all votes entitled to be cast at a stockholder meeting.

Management claims that the proposals seek to give the Lightstone REITs more flexibility and may facilitate a liquidity event, but critics say that shareholders are being asked to give up important rights without any clear plan going forward for the REITs to become liquid.

Non-traded REITs pose many risks that are often not readily apparent to retail investors, or adequately explained by the financial advisors and stockbrokers who recommend these complex investments. One significant risk associated with non-traded REITs has to do with their high up-front commissions, typically between 7-10%. In addition to high commissions, non-traded REITs generally charge investors for certain due diligence and administrative fees, ranging anywhere from 1-3%.

Furthermore, non-traded REITs are generally illiquid investments. Unlike traditional stocks and mutual funds, non-traded REITs do not trade on a national securities exchange. Many uninitiated investors in non-traded REITs have come to learn too late that their ability to exit their investment position is limited. Typically, investors in non-traded REITs can only exit their investment through redemption directly with the sponsor on a limited basis, and often at a disadvantageous price, or through sales in a limited secondary market.

Investors who wish to discuss a possible claim may contact a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation. Attorneys at the firm are admitted in New York, Wisconsin and various federal courts around the country, and handle cases nationwide (in cooperation with attorneys located in those states if required by applicable rules).

THIS ARTICLE IS INTENDED AS ATTORNEY ADVERTISING AND IS NOT AN OFFICIAL ANNOUNCEMENT

In 2021, the Securities and Exchange Commission (“SEC”) announced settled charges against investment adviser VII Peaks Capital, LLC (“VII Peaks Manager”) and its co-owner and managing member, Gurprit Chandhoke (“Chandhoke”), for breaching their fiduciary duty by engaging in transactions that benefitted themselves to the detriment of VII Peaks BDC, a business development company (BDC) managed by VII Peaks Manager.

According to the SEC’s order, from late 2015 through 2017, VII Peaks Manager and Chandhoke breached their fiduciary duty to VII Peaks BDC by engaging in transactions that were not disclosed to or approved by the Board of Directors of the BDC. The SEC charged that VII Peaks Manager collected over $722,500 in due diligence fees for loans made by the BDC to various portfolio companies, even though the loan documentation said that the fees belonged to the BDC. The SEC also charged that VII Peaks and Chandhoke caused VII Peaks BDC to make loans to portfolio companies in order to generate the fees for themselves.

Without admitting or denying the SEC’s findings, VII Peaks Manager agreed to a cease-and-desist order and to pay disgorgement of $722,500, prejudgment interest of $123,199, and a civil penalty of $185,000, while Chandhoke agreed to an associational suspension, investment company prohibition, and penny stock suspension, all for a period of twelve-months.

VII Peaks Manager, an investment management firm based in Orinda, California, reportedly invests primarily in discounted corporate fixed income securities and employs a “co-optivist” TM (co-operative activism) approach where they act as cooperative, activist investors who work with senior management teams of target companies to proactively restructure their outstanding corporate debt.

VII Peaks BDC is now reportedly in the process of liquidating its assets, after which liquidation the BDC will provide an uncertain sum of cash proceeds to shareholders. SEC filings indicate that the public offering price of VII Peaks BDC started at $10.15 per share but the offering price was later reduced to as low as $8.75 per share in May 2016 due to the net asset value of the fund’s common stock being reduced. As of year-end December 2017, the net asset value per share was reportedly $5.31, suggesting that investors in VII Peaks BDC have lost substantial principal.

Non-traded BDCs, as their name implies, do not trade on a national securities exchange, and are therefore illiquid products that are hard to sell (investors can typically only sell their shares through redemption with the issuer, or through a fragmented and illiquid secondary market). In addition, non-traded BDCs have high up-front fees (typically as high as 10%), which are apportioned to the broker, his or her broker-dealer, and the wholesale broker or manager.

BDCs have been around since the early 1980’s, when Congress first enacted legislation amending federal securities laws allowing for BDCs — which are simply types of closed-end funds — to make investments in developing companies and firms that would otherwise have difficulty accessing financing. In light of a BDC’s leveraged structure and its typical investment portfolio, however, uninformed investors may come to learn too late that their investment carries considerable risk. Moreover, non-traded BDCs such as VII Peaks BDC carry additional risks, including their lack of liquidity and high upfront fees and commissions.

Investors who wish to discuss a possible claim may contact a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation. Attorneys at the firm are admitted in New York, Wisconsin and various federal courts around the country, and handle cases nationwide (in cooperation with attorneys located in those states if required by applicable rules).

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