Investors in New York City REIT Inc., formerly known as American Realty Capital New York City REIT (“ARC NYC REIT”), may have arbitration claims to be pursued before the Financial Industry Regulatory Authority (“FINRA”), if their ARC NYC REIT 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 broker or financial advisor. According to its website, ARC NYC REIT is structured to provide its investors with a combination of current income and capital appreciation through strategic investments in high-quality commercial real estate located throughout the five boroughs of New York City.
In October 2019, the independent directors of ARC NYC REIT approved an estimated net asset value of $20.26 per share, as of June 30, 2019. Last year’s NAV per share was also $20.26, and shares were originally sold for $25.00 each.
However, net asset value or NAV may not reflect the actual value that shareholders would realize if ARC NYC REIT were liquidated, listed on an exchange or merged with a public company. Financial analysts frequently assume that non-traded investments such as ARC NYC REIT will trade at a discount to NAV if listed on a securities exchange. In a prominent example of this phenomenon, a large non-traded REIT known as American Finance Trust or AFIN listed its shares in 2018 had published an estimated NAV of $23.56 a share, yet shares later traded for as little as $10.08 after AFIN was listed on the Nasdaq Global Select Market. AFIN shares now trade at $14.56 a share as of the close of the market on December 4, 2019.