Certain Non-Traded Real-Estate Investment Trusts (REITs) have fallen up to 80% from recent reported statement prices. A survey of two major secondary market makers for these products reflected that that secondary markets for their REITs had fallen to new lows. One of these REITs, Carter Validus Mission Critical REIT II A has fallen to just $4.45 per share.
Non-Traded REITs, as their name suggests, are not traded on a stock exchange, and there is not an easy way to determine the value of these products. This leads to extremely limited liquidity, and recently numerous non-traded REITs have suspended or cut their distribution rate, which has limited their effectiveness as a consistent and reliable source of income for investors. Coupled with large upfront fees and commissions of up to 15%, the illiquid and uncertain nature of the cash flows make these non-traded REITs unsuitable for many investors. Most major brokerages do not sell the high cost Non-Traded REITS, which are typically marketed by third-tier independent brokerage firms.
The potential inability to trade and liquidate shares, as well as elimination of dividends, has translated into major financial losses for many non-traded REIT investors.
It is the duty of the brokerage firm to perform due diligence on any investment and to ensure that the investment is suitable for a particular investor in light of that investor’s age, investment objectives, income, net worth, and investment experience.
Oakes & Fosher Can Help
If you, or someone you know, have lost money being invested in Carter Validus Mission Critical REIT II A or any other Non-Traded REIT and are concerned about the valuation, dividend suspension, and/or the illiquidity of the product, please contact Oakes & Fosher for a free and private consultation. Oakes & Fosher handles cases on a contingency basis, which means there are no fees charged unless we collect for you.