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Investors in First Capital REIT, Formerly Known as United Realty Trust, May Have Legal Claims

Investors in First Capital Real Estate Trust (“First Capital”), a publicly registered, non-traded real estate investment trust (formerly known as United Realty Trust) may have FINRA arbitration claims, if their investment was recommended by a financial advisor who lacked a reasonable basis for the recommendation, or if the nature of the investment was misrepresented by the stockbroker or advisor.


First Capital REIT’s public offering was active between August 2012 and April 2016, although it has not file a quarterly financial report since the second quarter of 2015, nor has it filed an annual report since 2014.

As the foregoing delinquencies suggest, First Capital has been a slow motion train wreck for over five years.   In a January 2016 Securities and Exchange Commission (“SEC”) filing, the REIT stated that it was not moving forward with a 12-hotel acquisition because the hotel principals could not procure the necessary approvals for the transaction.  In a complaint, the SEC claims that the filing was materially misleading  because the potential transaction was not one that the REIT merely decided “not to move forward with” but instead the transaction allegedly foundered because First Capital’s then-CEO, Suneet Singal (“Singal”), did not actually own certain hotel properties that he had pledge to contribute.

Without admitting or denying the allegations in the SEC complaint first capital sec complaint Singal and certain entities associated with First Capital have now consented to be enjoined from violating the anti-fraud provisions of various federal securities laws.  The SEC release announcing the agreement is accessible here. Suneet Singal, First Capital Real Estate Investments, LLC, First Capital Real Estate Advisors LP, and First Capital Real Estate Trust Inc. (Release No. LR-25145; Jul. 21, 2021) ( Singal and First Capital Real Estate Investments, LLC reportedly agreed to pay, on a joint and several basis, $3.2 million in disgorgement and $676,400 in prejudgment interest, and further agreed to pay a civil monetary penalty of $3.2 million. Finally, the CEO consented to a bar for a period of 10 years from acting as an officer or director of a public company, according to the press release.

Broker dealers are required to perform adequate due diligence on any investment they recommend. They must ensure that all recommendations are suitable for the investor. Recommendations should be in line with the investor’s age, risk tolerance, net worth, and investment experience.  If brokerage firms fail to adequately disclose risks or make unsuitable investment recommendations can be held liable for investment losses.

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 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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