Real Estate Investment Trusts (REITs) are a popular investment vehicle designed to provide investors with access to income-producing real estate properties. While REITs can offer attractive returns and diversification, they are not without risks.Â
Many investors have suffered significant financial losses due to misconduct, misrepresentation, or unsuitable recommendations by brokers and financial advisors. If you experienced more than $100,000 of Real Estate Investment Trusts (REITs) loss claims due to an advisor’s misconduct, we can help.Â
Led by industry-renowned trial attorneys, our team of experienced attorneys at Meyer Wilson has recovered over $350 million for victims of investment fraud and financial misconduct.
Our investment fraud lawyers can explore your options for recovery through an arbitration claim. Call us today for a free initial consultation.Â
Recovering Losses from REIT InvestmentsÂ
Various types of broker misconduct are prevalent with non-traded REITs, which tend to have higher fees, limited liquidity, and complex structures that investors often misunderstand.Â
If you have lost money investing in Real Estate Investment Trusts (REITs) due to misconduct, you can file an arbitration claim to seek recovery, and our real estate investment scams lawyers will help. We are available to review potential cases involving the following REITs, among others:
- Starwood Real Estate Income Trust, Inc.Â
- LPL Financial Peakstone Realty Trust (Formerly Griffin Realty Trust)Â
- Healthcare Trust Inc.Â
- Silver Star Properties REIT, Inc.Â
- RAD Diversified REIT, Inc.Â
- CNL Healthcare Properties Highlands REIT
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Understanding the Risks of REIT Investments
By pooling funds from multiple investors, REITs allow individuals to benefit from real estate investments without directly owning or managing properties.Â
There are two primary types of REITs: publicly traded REITs, which are listed on stock exchanges, and non-traded REITs, which are not publicly traded and are often sold through brokers or financial advisors.
Publicly Traded REITs
Publicly traded REITs are generally considered more transparent and liquid than their non-traded counterparts because they are listed on major stock exchanges, and their shares can be bought or sold like traditional stocks.Â
Non-Traded REITs
Non-traded REITs, on the other hand, are private investments that are not easily liquidated. Thus, they are a riskier and more complex option for investors. Despite their risks, however, non-traded REITs are often marketed to individual investors as stable, income-generating investments.
Some of the key risks associated with non-traded REIT investments include:
- Liquidity Concerns: Non-traded REITs are highly illiquid, meaning investors cannot easily sell their shares. Redemption programs may also have restrictions, leaving investors unable to access their funds when needed.
- High Fees: Non-traded REITs often charge steep upfront fees—sometimes as high as 10% to 15%—which reduce the amount of capital invested and can significantly impact returns.
- Market Fluctuations: Like any investment tied to real estate, REITs are susceptible to market downturns, changes in interest rates, and other economic factors.
- Complexity: The intricate structure of non-traded REITs can make it difficult for investors to fully understand the risks, fees, and performance of their investment.
Types of Misconduct that Lead to Investor Losses in REIT Investments
Brokers and financial advisors who recommend REITs are legally obligated to act in the best interests of their clients. Unfortunately, some advisors fail to uphold this duty, leading to significant financial losses for investors. Common forms of misconduct related to REITs include:
- Unsuitable recommendations: Non-traded REITs are typically only appropriate for sophisticated or accredited investors with a high tolerance for risk. If your broker failed to assess your financial situation, risk tolerance, or investment goals, you may have been sold an unsuitable investment.
- Failure to disclose risks: Brokers are required to provide clear and accurate information about the risks associated with REIT investments. If your advisor downplayed liquidity concerns, high fees, or market risks, they may have acted improperly.
- Misrepresentation of returns: Some brokers and advisors may have exaggerated the potential returns of a REIT investment while failing to disclose that past performance is not indicative of future results.
- Churning: In some cases, brokers may engage in excessive trading or recommend frequent purchases of REITs to generate high commissions, regardless of the client’s best interests.
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Regulatory Actions and REIT-Related Disputes
In recent years, regulators such as the Financial Industry Regulatory Authority (FINRA) and the U.S. Securities and Exchange Commission (SEC) have increased their scrutiny of REITs and the practices of brokers who sell them.
Several high-profile cases have highlighted the risks associated with REIT investments, particularly non-traded REITs, and the potential for misconduct by financial professionals.
For example, some non-traded REITs have implemented redemption limits, leaving investors unable to access their funds during times of financial need. In other cases, brokers have faced disciplinary actions for recommending unsuitable REIT investments or failing to disclose critical risks to their clients.
If you have experienced losses related to a REIT investment, you may have legal options to recover your funds. Arbitration claims through FINRA or lawsuits against brokers and advisory firms are common methods for pursuing compensation in cases of investment misconduct.
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Meyer Wilson Can Help You Recover Your REIT Losses
Investing in Real Estate Investment Trusts (REITs) can be an appealing way to diversify your portfolio. Still, these investments often come with hidden risks, such as illiquidity, high fees, and market volatility. If your broker or financial advisor misrepresented the risks, provided unsuitable advice, or engaged in misconduct, you may have a right to recover your losses.
If you have lost money investing in Real Estate Investment Trusts (REITs) due to misconduct, misrepresentation, or unsuitable advice, Meyer Wilson is here to help. We have a proven track record of holding brokers, financial advisors, and investment firms accountable for their actions.
Call Us for Help With Your Real Estate Investment Trusts (REITs) Loss Claims
At Meyer Wilson, we exclusively represent investors who have suffered significant financial harm. Whether your losses stem from non-traded REITs, unsuitable investment recommendations, or other forms of financial misconduct, our attorneys have the knowledge and resources to fight for your rights.Â
We have successfully represented clients in state and federal courts and arbitration proceedings nationwide. If you believe you were misled or wronged by a REIT investment, contact Meyer Wilson today for a free consultation.Â
Our FINRA arbitration lawyers will evaluate your case and help you explore your options for pursuing compensation.
Recovering Losses Caused by Investment Misconduct.