Blog Topic

Grubb & Ellis Seeks Bankruptcy Protection
Posted by: Robert Rex
February 27, 2012

A recent article in the Investment News indicates that Grubb 7 Ellis Co. is selling most of its assets to BGC Partners and blaming on the 2007-2009 downturn in US real estate markets, has filed for bankruptcy protection.

It is not presently known what impact this bankruptcy filing may have on the Grubb & Ellis REITs , such as Grubb & Ellis Healthcare REIT or Grubb & Ellis Apartment REIT. 

We are presently investigating claims on behalf of REIT investors, including Grubb & Ellis REITs.

If you invested in REITs which have declined in value or REITs for which it is difficult to determine the current value, you may be able to recover damages. Initial consultation is free. Call Bob Rex, Esq. at 561 391 1900 or visit our website.  

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Rex Files Arbitration for Losses on KBS REIT
Posted by: Robert Rex
February 16, 2012

We recently filed a FINRA arbitration for an elderly client who had significant losses in KBS REIT. If you have information you feel would be helpful to this investigation, please call us at 561 391 1900.

If you have questions about KBS REIT or any other investment , do not hesitate to contact us. You may visit our website at www.dmrslaw.com. 

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Rex Investigates Healthcare Trust REIT
Posted by: Robert Rex
February 16, 2012

We are currently investigating the facts and circumstances related to the sale of interests in Healthcare Trust of America, Inc. a self managed real estate investment trust. If you have questions about this or any other REIT, please do not hestitate to contact us at 561 391 1900.

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FINRA SUES DAVID LERNER DECEMBER 2011
Posted by: Robert Rex
January 31, 2012

In December 2011, FINRA sued Lerner individually for statements he made in an attempt to quell anxious customers claiming that Lerner mislead investors about risk and valuation when marketing $2 billion in non-traded REITs. FINRA allegations related to Apple REIT Ten and claim that Lerner inappropriately valued the REITs at a constant and artificial price, thereby keeping knowledge of the loss in the investment from the investor.  Link to FINRA action.

Lerner made misleading and exaggerated statements at seminars he hosted and also in a radio advertising campaign where he told listeners to "take a tip from Pappy".

If you have questions about REIT losses or any other question about the way your brokerage account or investment adviser account has been handled, please call Robert H. Rex, Esq. at 561 391 1900. We have been helping investors recover losses for over 20 years.

www.dmrslaw.com

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BEHRINGER HARVARD OPPORTUNITY REIT I-DOWN 46%
Posted by: Robert Rex
January 23, 2012

According to a recent article in the Investment News, the year end value of the Behringer Harvard Opportunity REIT I was down 46% from a year earlier. The current estimated value is $4.12 a share vs. $7.66 a share a year ago.

In 2009, its value was $10 and it has been steadily dropping. According to analysts the falling valuation is due to the deep decline of six real estate properties in the portfolio. While the goal for most nontraded REITs is to return the invested principal to investors, analysts admit that "will be a real challenge" in this case.

FINRA has proposed regulations that would require more disclosure on the valuation of nontraded REITs as they appear on client statements. Presently there is a lack of transparency with regard to commissions and upfront costs when valuing the investments.

Brokers have a duty to make suitable recommendations when offering advise on your portfolio. If you have suffered losses on REITs or any other investment and have questions about your rights, please give us a call at 561 391 1900 begin_of_the_skype_highlighting 561 391 1900 end_of_the_skype_highlighting or email Robert Rex, Esq. at rhr@dmrslaw.com . Visit our main website for more information http://www.dmrslaw.com/ .

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SEC INVESTOR BULLETIN ON NON-TRADED REITS
Posted by: Robert Rex
January 06, 2012

The Securities & Exchange Commission issued an Investor Bulletin describing the necessary qualifications of a real estate investment trust, commonly referred to as a REIT. That bulletin may be read in its entirety at:

 http://www.sec.gov/investor/alerts/reits.pdf

REITS may be publicly traded or non-traded (private). As suggested by the name, publicly traded REITs trade on national exchanges and non-traded REITs do not. Non-traded REITs may not be liquid and may be difficult or impossible to value. Sales commissions on non-traded REITs are generally substantially higher than for traded REITs. The lack of liquidity, lack of share transparency, the significant up-front fees, the fact there are often conflicts of interest between the REIT and related parties and the fact that distributions may be paid from offering proceeds or borrowing make the purchase of non-traded REITs somewhat more risky than other investments.

Recently we have be consulted by a number of investors who have suffered losses as a result of investing in non-traded REITs. If you have questions about this or any other matter related to your investment account, please call us at 561 391 1900 , email rhr@dmrslaw.com or visit our website www.dmrslaw.com .   

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FINRA Initiates Action Against David Lerner and Associates Related to Sale of REITs
Posted by: Robert Rex
June 06, 2011

The Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) has filed a complaint against David Lerner and Associates related to the sale of certain Real Estate Investment Trusts (REITs).

The complaint alleges that David Lerner has sold over $300 million dollars of the Apple REIT Ten without regard to its suitability for investors. They sold the investment to unsophisticated and elderly clients (click here to read our earlier blog post about illiquid private REITS) using misleading marketing on their website, misrepresenting the value and potential returns of the investment.

In filing its complaint, FINRA seeks that fines and sanctions be levied against David Lerner for victimizing elderly and unsophisticated investors.

 If you invested in REITs through David Lerner and Associates and would like more information, please contact our office at 561-391-1900 or by e-mail at nlt@dmrslaw.com.

 Link to FINRA's complaint: http://www.finra.org/web/groups/industry/@ip/@enf/@ad/documents/industry/p123739.pdf                                      

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Losses in Private or Non-Traded REITs
Posted by: Robert Rex
June 06, 2011

The securities arbitration division of the law offices of Dickenson, Murphy, Rex and Sloan PA is investigating potential securities arbitration claims for investors who were sold shares in non-traded REITs by David Lerner and Associates, Linsco Private Ledger, and others.

Private REITs were once touted by investment advisors to be safe, dividend-paying investments. Similar to traditional REITs but not traded on any exchange, these could provide regular income to investors without having their value rise and fall with the pressures of the open market. When the trusts are properly administered and the market is good, they can provide healthy returns to investors, sometimes on the order of 10%. These high returns, combined with the unusually high fees and commissions brokers could take for themselves when selling these funds, made them a popular investment in recent years. According to research firm Blue Vault Partners LLC, non-traded REITs raised $8.1 billion in fresh capital in 2010 alone.

Unfortunately, it is precisely the fact that these trusts are not traded that provides the potential for disaster. If the market is no longer doing so well and a private REIT runs into trouble, its administrators can choose to suspend dividend payments in order to stay liquid. Because these are not traded on any open market, the only way an investor can offload them is by selling them back to the REIT through its buyback provision. When things are not going well, the trust can choose to suspend buybacks as well, leaving investors with non-dividend paying, illiquid investments of indeterminable value. Nontraded REITs are not as regulated as their traded counterparts and can operate with little transparency, further increasing the potential for misconduct. Investors are often surprised to find they are bound by long and complicated exit clauses when they try to liquidate their holdings.

It?s not unlikely that the prospect of charging the elevated fees and commissions (sometimes on the order of 10-15%) that are common in private REITs could have led investment advisors to understate these risks to investors seeking safe, dividend paying investments, leaving the investor "holding the bag" when things go south. The illiquid nature of non-traded REITs makes them especially unsuitable for elderly and retired clients. These investments appear to have been sold by brokers at firms including David Lerner and Associates, LPL (Linsco Private Ledger), Citigroup, and others.

 Individuals who suffered losses from investments in untraded or private REITs can contact attorney Robert H. Rex or Nan Thompson at thelaw offices of Dickenson, Murphy Rex and Sloan PA. Mr. Rex is dedicated to pursuing claims on behalf of investors and practices exclusively in the field of securities arbitration. If you wish to discuss this announcement, please contact him at 561-391-1900 or by e-mail at nlt@dmrslaw.com.

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