Investors in Lightstone Real Estate Income Trust, Inc. (“Lightstone REIT”) 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.
Lightstone REIT was incorporated on September 9, 2014 as a Maryland corporation that elected to be taxed as a real estate investment trust (REIT). As a publicly registered non-traded REIT, Lightstone REIT 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. Lightstone REIT began offering securities in February 2015 and terminated its offering in March 2017 after raising approximately $85.6 million in investor equity. Lightstone REIT originates, acquires, and manages a diverse set of real estate properties across the United States.
The Board of Lightstone REIT recently approved a 50% decrease in monthly distributions from an annual rate of 8.0 percent to 4.0 percent. The stated purpose of this reduction is due to liquidity and operating costs concerns as well as a belief that the original 8% was no longer sustainable based upon the funds available from operations.