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Several troubled non-traded REITs have looked to IPOs to bail themselves out and avoid litigation with investors, but Retail Properties of America (formerly called Inland Western REIT), the nation's third-largest shopping center REIT, may have exacerbated its troubles with its recent IPO offering. It is being reported that Retail Properties' $8 offering price not only came up well short of its expected pre-offering price of $10 to $12, but it took some reverse-stock-split engineering just to get the price to $8. For those investors who originally bought the REIT at $10 a share, the actual split-adjusted value of the stock is less than $3 per share (a decline of over 70%). This should dampen the enthusiasm for future REIT stock offerings and give pause to other non-traded REITs looking at an IPO as an option to bail out of litigation.

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