Over the past several years, many retail investors were steered into investing in non-traded REITs such as SRT by stockbrokers or financial advisors. Frequent selling points for non-traded REIT investments include presenting these securities as steady income-producing investments and as solid long-term investments due to their underlying investments in real estate. Some investors may not have been informed of the complexities and risks associated with non-traded REITs, including the investment’s high fees and illiquid nature.
Currently, investors who wish to sell their shares of SRT have limited options available to exit their investment position. For example, SRT suspended its share redemption program effective as of January 15, 2013. During the years ended 2013 and 2014, SRT did not redeem any shares under the redemption program. Thereafter, on April 1, 2015, SRT’s Board approved the reinstatement of the share redemption program, but only as it relates to the death or qualifying disability of the shareholder.
SRT investors seeking liquidity may opt to sell their shares on a secondary market, but the market is thinly traded and, therefore, the pricing is inefficient and disadvantageous to SRT investors who acquired shares through the IPO at $10 per share. For example, SRT shares were recently listed on Central Trade & Transfer at $4.60 per share. This recent pricing suggests that investors in SRT who wish to sell out of this non-traded REIT in the near term will incur losses of approximately 54%.
If you have invested in SRT, or another non-traded REIT, and you have suffered losses in connection with your investment (or are currently unable to exit your illiquid investment position without incurring such losses), you may be able to recover your losses in FINRA arbitration. To find out more about your legal rights and options, contact a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation.