Articles Tagged with Moody National REIT II

Investors in Moody National REIT II (“Moody II”) may have FINRA arbitration claims, if their investment was recommended by a stockbroker or financial advisor who lacked a reasonable basis for the recommendation, or if the nature of the investment was misrepresented.

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.

Investors in Moody National REIT II (sometimes referred to below as “Moody REIT II”) 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.

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.

Investors in Moody National REIT II (“Moody II”)  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.

Moody II announced in August 2021 that its Board had made the decision to postpone the valuation of its shares. Considering that the non-traded REIT has not updated its net asset value (NAV) since December 2019, investors may have cause for concern that the shares’ value has dropped.   The last estimate of Moody II’s net asset value (NAV) per share- which now seems hopelessly unrealistic- was $23.50 a share as of late 2019.

Moody II is a non-traded real estate investment trust (non-traded REIT).  According to secondary market quotes, Moody II shares have decreased in value   Investors who were relying on Moody II’s most recent (but now nearly two-year-old) estimated NAV (net asset value) of $23.50 a share announced by its sponsor could be in for an unwelcome surprise, as shares have reportedly been sold on the limited secondary market for prices as low as between $5.50 and $6.00 a share during 2021.