Concerned about investment losses in a Moody National REIT?
On March 14, 2017, Moody National Reit I, Inc. and Moody National REIT II, Inc. released statements in rebuttal to a recent Stanger Report that critiques the pending merger between Moody REIT I and Moody REIT II. The statement notes that Moody REIT I had solicited 99 potential third party buyers and had not received a superior proposal to the pending merger between Moody REIT I and Moody REIT II.
Both entities are publicly registered, non-listed REITs that focus on select-service hotels in major U.S. markets, and both are sponsored by Moody National REIT Sponsor LLC, an affiliate of the Moody National Cos., a full-service CRE company based in Houston.
On March 14, 2017, Moody National REIT II, Inc. (Moody REIT II) announced that it had suspended its share repurchase program effective March 24, 2017. Moody REIT II anticipates reinstating the share repurchase program following the completion of its merger with Moody National REIT I, Inc.
What is a REIT?
A real estate investment trust (REIT) is a company that owns, and in most cases, operates income-producing real estate. REITs own many types of commercial real estate, ranging from office and apartment buildings to warehouses, hospitals, shopping centers, hotels and even timberlands. Some REITs also engage in financing real estate. The REIT structure was designed to provide a real estate investment structure similar to the structure mutual funds provide for investment in stocks.
REITs are complex and high risk investments that are really only suitable for sophisticated investors. It is the duty of the brokerage firm to perform due diligence on any investment and to ensure that the investment is suitable for a particular investor in light of that investor’s age, investment objectives, income, net worth, and investment experience. Given the current risk of devaluation of these REITs, such investments are likely only suitable for wealthy and/or sophisticated investors.
Financial advisors have a fiduciary duty to put their client’s needs ahead of their own. If a stockbroker recommends an investment that is unsuitable for the client or fails to perform adequate due diligence on an investment, the advisor and his/her firm can be held liable for the resulting losses.
The White Law Group continues to investigate the liability that brokerage firms have for recommending REITs unsuitably. The firm has filed FINRA arbitrations to try to recover losses in the following REITs (among others): Desert Capital REIT, Behringer Harvard, Wells REIT, Hines REIT, KBS REIT, CNL Lifestyle, Inland America, Inland Western, Apple REIT, Wells Timberland, Cornerstone REIT, and Cole REIT.
If you believe that you are the victim of your advisor recommending a REIT to you inappropriately, please call the securities attorneys of The White Law Group at (888) 637-5510 for a free consultation.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida. For more information on The White Law Group visit http://www.whitesecuritieslaw.com.
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