The Securities Law Firm of Menzer & Hill, P.A., is investigating those Broker-Dealers that recommended Behringer Harvard REIT I ("Behringer") to their clients. Behringer raised in excess of $2.9 billion and recently reduced its share value to $4.25 a share. The dividend rate was also cut to 1%.
Non-traded REITs such as Behringer contain substantial risks despite the fact that many Brokers and Broker Dealers tout them as safe investments to retirees. What many investors don't realize is that many non-traded REITs do not generate enough income to cover their dividend payments and clients in reality are getting paid back with their own principal.
Additionally, many investors do not realize that REITs like Behringer are some of the highest commission products that Broker Dealers offer, which explains why Brokers are so eager to push them on their clients. When you factor in commissions and fees, many REITs would need to generate returns of 15% to break even.
Under FINRA rules and regulations, Broker Dealers are required to inform their clients of these substantial risks or they may be held responsible for their client losses through a FIRNA arbitration.
Contact our Securities Attorneys if you've sustained investment losses in Behringer Harvard REIT I.