Real Estate Investment Trusts (REITs)

What are Real Estate Investment Trusts (REITs)?

There are several different kinds of REITs. Exchange-traded REITs are securities that sell like stock on the major exchanges and directly invest in real estate. Equity REITs invest in and own properties. They are responsible for the value of their real estate assets and generate revenue from renting their properties. Mortgage REITs loan money to owners of real estate for mortgages or purchase existing mortgages or mortgage-backed securities. Their revenues are generated by the interest they earn on the mortgage loans. Hybrid REITs combine the investment strategies of equity and mortgage REITs by investing in both properties and mortgages.

What are non-traded REITS?

Non-traded REITs are Real Estate Investment Trusts that are not traded on a securities exchange.

Are non-traded REITs a good investment?

Non-traded REITs come with significant risks. They are illiquid, high-commission, and often dictate when investors can redeem their shares. A non-traded REIT may be illiquid for long periods of time, and front-end fees can be as much as 15% – much higher than a traded REIT due to its limited secondary market. And although the products themselves raise money by selling shares to investors, the broker-dealers collect hefty commissions from their sale.  Moreover, early redemption of a non-traded REIT can result in excessive fees that lower an investor’s total return.

What can you do if you experienced REIT losses?

Brokers and brokerage firms have an obligation to make sure their investors are fully informed of the risks associated with a REIT investment, and to make sure REITs are a suitable investment for their clients. If you believe you have been defrauded by a REIT investment, it’s advisable to have an experienced lawyer review your case.

Take the next steps to find out if you have a claim:

Step 1.

Talk to an Experienced Attorney Today

Call and speak to one of our attorneys* for a no-cost consultation to discuss your situation, answer your questions, and help you determine the next steps. This call usually takes about 15 minutes, but we are happy to talk to you as long as you would like!

Step 2.

Quick Review of Your Paperwork

If we think you might have a case, we will need to review a few basic documents. If we determine you have a case, then you will have the option to hire us as your attorneys to pursue it.

Step 3.

Signed Attorney/Client Agreement

If you decide to hire us to pursue your case, we will have you sign an attorney-client agreement so we can begin the process of trying to recover your losses.*

*In the vast majority of cases, our agreement is contingent – meaning you won’t owe us any money unless we recover money for you.

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