Investor Lawyers Blog
Investors with losses in Healthcare Trust, Inc. a non-traded real estate investment trust (Non-Traded REIT) may have arbitration claims if a broker or advisor made a recommendation to purchase the shares without a reasonable basis or misled the customer as to the nature of the investment. Healthcare Trust is an investment trust which seeks to acquire a diversified portfolio of real estate properties focusing primarily on healthcare-related assets including medical office buildings, seniors housing, and other healthcare-related facilities.
According to secondary market providers that allow investors to bid and sell illiquid products such as Non-Traded REITs, shares in Healthcare Trust are selling for about $14.99 per share – which represents a significant principal loss compared with the offering price of $25.00.
Many FINRA arbitration cases in recent years have involved direct participation products (DPPs), private placements, Non-Traded REITs, and other alternative investments. These products are almost always unsuitable for middle class investors.
Further, studies have shown that non-traded REITs have historically have underperformed even safe benchmarks, like U.S. treasury bonds – and have drastically underperformed publicly-traded REITs– meaning that non-traded REITs provide very poor investment returns relative to their risks.
Unfortunately for many investors in Healthcare Trust, it would appear that any attempt to exit their illiquid investment will incur a substantial loss. Aside from their illiquid nature, non-traded REITs also present significant additional risks. One of these risks has to do with their high cost. In most instances, non-traded REITs are sold through a network of independent broker-dealers and associated financial advisors, who earn steep commissions (ranging up to 10%) on sales of non-traded REITs to investors. In addition to the sales commission charged, non-traded REITs typically charge other expenses, including certain due diligence and administrative fees (that can range anywhere from 1-3%).
The attorneys at Law Office of Christopher J. Gray, P.C. have significant experience in representing investors who have incurred losses in connection with non-traded REITs, including recovering losses through FINRA arbitration, as well as litigation. Investors may contact our office at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation.