Lodging Fund REIT III, a non-traded Real Estate Investment Trust, or REIT, presents a problematic investment for retail investors who are often sold these investments as a stable way to generate retirement income. Non-traded REITs like Lodging Fund REIT III operate in an illiquid, opaque, and incredibly expensive environment. Unveiling Potential Risks and Considerations
Investors in non-traded REITs such as Lodging Fund REIT III should understand the associated risks and costs. Non-traded REITs can impose substantial fees, potentially reaching 15%. If you ask an investor whether they would agree to a 15% fee (meaning the investment would have to make 15% just to break even), it is likely the investor would say, “no thank you,” and pick a new advisor. Unconflicted advisors do not sell such products, as these fees materially impact overall returns. These investments typically necessitate a prolonged commitment of 7-10 years, significantly constraining liquidity, especially during financial emergencies.
Our legal team at Meyer Wilson warns investors about potential misconduct or misrepresentation by financial advisors, which can lead to substantial losses. Our firm has successfully recovered over $350 million for clients in various investment fraud cases, including those involving REITs.
To learn more about non-traded REITs, watch our video and consider these recent market insights: Non-traded REITs raised $1.5 billion in the first quarter of 2024, showing a 69% increase year-over-year when including UPREIT transactions. However, the overall fundraising trend has slowed compared to previous years. While non-traded REITs continue to attract significant capital, it’s important to stay in-the-know about market dynamics and potential risks.
Empowering Investors: Due Diligence and Protection Strategies
Thorough due diligence is paramount when considering any REIT investment. David P. Meyer, an experienced and well-versed investment fraud attorney and author of “The Investor Protector,” stresses the critical importance of comprehending specific terms, fee structures, and potential risks associated with these investments. If your advisor cannot explain it to you in a way you understand, the advisor should not be selling it to you. Period.
Investors should keep a watchful eye about unauthorized trading or churning, which can lead to significant financial repercussions. While these issues can affect both traded and non-traded REITs, they may be more challenging to detect in non-traded variants due to their lower liquidity.
We Have Recovered Over
$350 Million for Our Clients Nationwide.
The Value of Professional Guidance
If you invested in a non-traded REIT without full disclosure of the facts, costs, and risks, we strongly encourage you to reach out to our experienced financial and legal professionals for guidance. Our team of attorneys at Meyer Wilson not only have deep knowledge of REIT-related investments but can also offer you peace of mind through invaluable insights.
We know how much your financial future means to you, which is why our firm is committed to protecting investors like you. If you’re feeling worried about your investments or suspect something might be amiss, reach out to us. We offer complimentary consultations because we want to help ease your concerns and ensure your financial well-being.
Strategic Evaluation of Non-Traded REIT Investments in 2025
While Lodging Fund REIT III and similar non-traded REITs may offer certain advantages, they come with unique risks and considerations that demand careful evaluation. As we traverse through 2025, it’s important to observe that the REIT market is experiencing significant shifts.
According to recent market analyses, there’s an ongoing convergence between public and private real estate valuations, potentially creating new investment opportunities. However, economic uncertainties, higher interest rates, and evolving property fundamentals continue to shape the environment, making professional guidance more valuable than ever.
The SEC warns that non-traded REITs may utilize funds from offerings and loans to distribute payments, potentially diminishing share value. With the dynamic environment, protecting your investments is paramount and utilizing professional insights can empower you to make more informed and confident investment decisions in the evolving REIT market of 2025 and beyond.
Recovering Losses Caused by Investment Misconduct.
