Investor Lawyers Blog
As recently reported, the Board of Directors of The Parking REIT, Inc. have unanimously authorized a suspension of the company’s cash distributions and stock dividends, effective immediately. In conjunction with filing a Form 8-K with the SEC on March 23, 2018, the company issued a press release indicating, inter alia, that “The Board is focused on preserving capital in order to maintain sufficient liquidity to continue to operate the business and maintain compliance with debt covenants, including minimum liquidity covenants…”
Headquartered in Las Vegas, NV, The Parking REIT (f/k/a MVP REIT II, Inc.) holds a real estate investment portfolio consisting of 44 parking facilities across 15 states, with an estimated aggregate asset value of $280 million. As a publicly registered non-traded REIT, The Parking REIT is a particularly complex and risky investment vehicle. Among the risks associated with non-traded REITs are their characteristically high up-front fees and commissions (as high as 15% in some instances), as well their illiquid nature.
Unlike exchange traded REITs, non-traded REITs do not trade on a national securities exchange, and therefore cannot be readily sold and resold on a liquid exchange. Further, as is the case with The Parking REIT, investors may unfortunately encounter a scenario where the Board elects to reduce or altogether suspend distributions and/or dividends. For many investors in non-traded REITs, one of their primary reasons for investing in the first instance has to do with the enhanced yield often associated with non-traded REITs. However, when the prospect of steady income through distributions disappears, the investor is left with an illiquid investment position that cannot be easily or readily exited.
Investors in The Parking REIT may have arbitration claims to be pursued before the Financial Industry Regulatory Authority (“FINRA”), if their investment in The Parking REIT was recommended by a financial advisor who lacked a reasonable basis for the recommendation, or if the nature of the investment was misrepresented by the financial advisor. Investors may 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.