Strategic Realty Trust Losses.
Lufrano law is investigating claims on behalf of investors of Strategic Realty Trust Inc. (“Strategic Realty”), formerly the TNP Strategic Realty Trust Inc., which recently told investors in a shareholder letter that the REIT’s valuation was reduced to $7.11 per share from $10 - a decline of 29%.
Investors in real estate investment trusts (REITs), on the whole, have enjoyed modest gains in recent years due to the general improvement in the real estate market. However, not all REIT investors are satisfied and have shared in the rebound in the real estate market. In particular, some REITs that are not publicly traded on an exchange (called “non-traded REITs”) have suffered declines in value due to high fees and transaction costs that can erode shareholder value. Unfortunately for investors, Strategic Realty falls in the latter category of non-traded REITs.
Strategic Realty began raising investor money in August 2009. Strategic Realty owns a portfolio of 16 shopping centers and has seen property appreciation of $1.65 per share since its inception. However, over the past five years those gains were offset by transactions costs of $1.54 per share, offering and organization costs of $1.23 per share, return of capital to investors through distributions of $1.04 per share, and a per-share loss of 52 cents on a property in Hawaii.
The staggering decline in the value of Strategic Reality comes as a shock to some investors who recently purchased the Strategic Realty Trust for $10 per share based on inflated promises. Indeed, it is often difficult for unsophisticated investors to analyze non-traded REITs and parse through pages of fine print and financial analysis to properly evaluate the product. This exercise is even more difficult when non-transparent pricing and misrepresentations by the managing company assist financial advisors who peddle these products upon unsuspecting investors. For example, in January 2013, the REIT claimed to have an estimated net asset value of $10.60.
Unfortunately, Strategic Realty’s recent decline is an all too common story for non-traded REIT investors. The cost structure of non-traded REITs investments, including sky-high sales commissions (typically between 8% and 12%), makes it difficult for the investments to succeed even in the best of investing climates. Additionally, non-traded REITs cannot be easily sold on the secondary market, which means the REIT’s value cannot be ascertained easily and is an unsuitable investment for investors who need liquidity.
If you purchased the Strategic Realty non-traded REIT based upon your financial advisor’s recommendation, then you may be able to recover your losses. Lufrano Law, LLC is a national securities litigation firm and has experience representing investors who have investment disputes with brokers and broker-dealers. Please contact us today for a free, no-commitment consultation.
SPEAK TO AN
We are always happy to see you Visit Our Showroom
Location: 818 Harrison Street, Ste. 210, Oak Park, IL 60304
Disclaimer: This is attorney advertising. The information on this website is for general purposes only and should not be interpreted to indicate a certain result will occur in your specific legal situation. Viewing information on this website is not legal advice and does not create an attorney-client relationship. In addition, sending us information about your legal needs does not establish an attorney-client relationship. The Supreme Court of Illinois does not recognize certifications of specialties in the practice of law and the certificate, award or recognition is not a requirement to practice law in Illinois.
© Copyright 2016.