For the third day in a row, the Investment News has featured the ongoing problems with REITs (Real Estate Investment Trusts. We featured both of these prior reports, one which highlighted the fact that KBS Real Estate Investment Trust has dropped in value again and distributions have ceased, and another showing the decline in value of the Behringer Harvard, Cornerstone Core, Inland Western and KBS REITs.
Today's story deals with Inland American Real Estate Trust (value down from $10 to $7.22) and Cornerstone Core Properties (value down from $8 to $2.25). These REITs were sold to a 63 year old lady who noticed that Inland was having some problems and showing losses. During her meeting with the broker in summer of 2008 to discuss this, the broker sold her the Cornerstone REIT. This investor was not aware, until later, that non-traded REITs are not liquid. They do not trade on any conventional market and can only be sold on a few secondary markets that exist, selling at a discount of 20-30% of the estimated value published by the company.
Making matters worse is the fact that these investments were placed in an IRA and comprised over 50% of the value of the IRA. This is clearly an unsuitable over-concentration issue.
Many of our current clients purchased REITs with the promise of steady monthly income and a belief that the investment would maintain value. If you have losses in REIT investments, you may be able to recover some or all of your losses.
Call us at 561 391 1900 or visit our website for more information. We have been helping investors recover stock market losses for over twenty years. Nationwide representation. Free initial consultation.
Rex Securities Law
Boca Raton, FL
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.