At Sonn Law Group, we are currently investigating investor complaints against Highlands REIT, a non-traded real estate investment trust. Previously, Highlands REIT was a part of InvenTrust Properties, but the company was spun off in April of 2016 when InvenTrust entered into a separation and distribution agreement.
At this time, many complaints have been raised against how Highlands REIT is handling its business. Some investors have sustained considerable losses. Here, our top-rated investor protection attorneys explain why complaints are being filed against Highlands REIT.
Investor Claims Against Highlands REIT
Real Estate Investment Trusts (REITs): Understanding the Basics
A Real Estate Investment Trust is a company that owns income-producing real estate properties. Investors are then able to put their money into that company, thereby gaining exposure to the investment company’s real estate portfolio.
While this type of arrangement can offer benefits to some investors, it comes with considerable downsides. Notably, REITs are notoriously risky investments and are not suitable for the majority of investors.
InvenTrust Pushed Troubled Assets On Highlands REIT
When Highlands REIT was spun off from InvenTrust, many different toxic assets were pushed onto this new company. In fact, InvenTrust was able to dramatically improve its own balance sheet by sending certain real estate properties to the books of Highlands REIT.
For example, currently Highlands owns a prison in Colorado that is unoccupied. The company also owns another prison in Texas that is about to be vacated by the state’s prison board. Further, Highlands owns the AT&T Center in Downtown St. Louis, a 44-story high rise that AT&T, the sole tenant, is planning on vacating when the lease expires in September of 2017.
The bottom line: Highlands REIT faces serious trouble in the coming months. The company is quickly losing out on its revenue streams, and is holding many large investment properties that may produce little or no income going forward. Further, Highlands REIT still holds a large amount of debt related to many of its unviable commercial properties.
Highlands REITs is Non-Traded, Making it Difficult for Investors to Get Out
Like InvenTrust, Highlands is a non-traded REIT. This means that it is very difficult for investors to get out of this financial product once they have put their money into it. In fact, one of the primary reasons why non-traded REITs are so risky is that they are fundamentally illiquid investment products.
Not only can it take a long time to get out of this type of investment, but when things are going poorly, it may not be possible at all. As such, these types of REITs are simply unsuitable for most investors. RIAs have a legal duty to protect clients from these types of investments should their risk profile not match up.
Contact Our Investor Losses Lawyer Today
At Sonn Law Group, we have extensive experience handling complex investment fraud and investment negligence claims. If you lost money investing with Highlands REIT, our team is standing by, ready to hear your case. Please do not delay in calling us toll free today at 844-689-5754 to request your free, no strings attached legal consultation.