Investor Lawyers Blog
Investors in The Necessity Retail REIT, Inc. (“Necessity REIT”), formerly known as American Finance Trust, Inc. (AFIN) and, before that, as American Realty Capital Trust V, Inc., may have FINRA arbitration claims, if their investment 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 stockbroker or advisor.
Necessity REIT listed its shares on Nasdaq Global Select Market (“Nasdaq”) under the ticker symbol “AFIN” effective July 19, 2018. The Company later changed its name to The Necessity Retail REIT and adopted the ticker symbol “RTL” in February 2022. Before listing its shares on Nasdaq, Necessity REIT (then known as American Finance Trust) published an “estimated per share” net asset value of $23.56 in June 2018- leaving investors surprised when the REIT’s shares plummeted in value after being listed on Nasdaq only a month later in July 2018. The REIT’s shares have continued to languish, and as of January 2023, Necessity REIT shares were trading at below $7.00 a share- meaning that investors who bought shares in the initial offering would have lost well over half of their initial investment.
More recently, an investor in Necessity REIT known as Blackwells Capital, LLC (“Blackwells”) has called for corporate governance changes and new directors for the REIT. According to a recent news article, Blackwells reportedly notes that Necessity REIT trades at a 68.5% discount to its net asset value or “NAV” which, according to Blackwells, represents poor performance relative to comparable REITs. Blackwells reportedly filed a lawsuit against Necessity REIT in December, 2022, challenging Necessity REIT’s interpretation of the meaning of a July 2022 bylaw amendment concerning the appointment of directors to the REIT’s board. Blackwells has nominated two candidates for the Necessity REIT’s board, who have been rejected by the REIT, precipitating the lawsuit.