Español Inner

Articles Tagged with Inland American REIT

Published on:

Inland American REIT has changed its name to Inventrust Properties Corp. In addition, the Company’s SEC fillings report a recent tender offer of $2.00 per unit from Mackenzie Realty. The $2.00 a share tender offer represents a sharp dropoff from Inland American’s initial offering price of $10.00 a share.

15.6.11 building explodesInland American is an enormous company- the largest of the giant non-traded REITS. The Company had raised a total of approximately $8.0 billion of gross offering proceeds as of December 31, 2008.

Inland American is a non-traded REIT, meaning that its shares are not listed on a national securities exchange. However, sales of shares in non-traded REITs, which file periodic reports with the Securities Exchange Commission as do listed companies, are not limited to accredited investors and shares are sold to the general public through brokers.

Published on:

On December 19, 2012, Inland American Real Estate Trust Inc. stated that its per share price valuation was decreasing from $7.22 per share to $6.93 per share. Securities fraud attorneys say this last devaluation represents a 30 percent decrease from its original price of $10 per share. With assets amounting to $12.2 billion, Inland American REIT is the largest REIT that has seen a decline in valuation recently. Allegedly, the devaluation is a result of increased capitalization rates.

Inland American REIT Share Price Cut Again

Non-traded REITs such as Inland American carry a relatively high dividend or high interest, making them attractive to investors. And in many cases, stock fraud lawyers say brokers may have represented Inland American REIT as a safe, conservative investment. However, in reality, non-traded REITs are inherently risky and illiquid. Some of the factors that make REITs risky investments are that distributions are not guaranteed, and shares can be very difficult to sell because there is no public trading market.   Non-traded REITs’ valuation can be affected by many factors, including the trust’s balance sheet strength, cost of capital, overhead expenses and the portfolio of assets owned. 

Public non-traded REITs often carry high commissions that can motivate brokers to  recommend them to investors despite the investment’s unsuitability. The commission on a non-traded REIT is often as high as 15 percent. Securities fraud attorneys say that if Inland American REIT was misrepresented by their brokers as safe, clients may be able to recover losses through securities arbitration. Furthermore, some brokers allegedly put a substantial amount of some clients’ assets in the REIT which resulted in an over-concentration that was unsuitable for investors.

Published on:

Earlier in October, another claim was filed in an effort to help investors recover REIT losses. This claim was against LPL Financial and its goal is to recover losses sustained in Retail Properties of America, formerly known as Inland Western Real Estate Investment Trust. This claim, which was filed with FINRA, also involves eight other alternative, illiquid investments, and is seeking $1,000,000 in damages.

Recovery of Inland Western REIT Losses

Typically, REITs 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 carry a relatively high dividend or high interest, making them attractive to retired investors. However, non-traded REITs are inherently risky and illiquid, which limits access of funds to investors. In addition, frequent updates of the investment’s current price are not required of broker-dealers, causing misunderstandings about the financial condition of the investment. Because frequent updates are not required, investors may believe the REIT is doing much better than it actually is.

Reportedly, LPL Financial and its advisor, used an over-concentration of illiquid investments in the client’s portfolio. Furthermore, these investments carried a high level of risk because the securities recommended to the claimant didn’t trade freely. In addition to the Inland Western REIT, the portfolio also consisted of KBS REIT, Inland American REIT, LEAF Fund, Hines REIT, Atlas, ATEL Fund X, PDC 2005A, and ATEL Fund XI

Contact Information