Parking REIT investors may have suffered losses of over 75% of their investment principal, based on recent tender offers of less than $6.00 per share made by MacKenzie Capital Management. Furthermore, data from limited secondary trading data sources shows a sale in June 2020 for amounts as low as $5.01 per share. The Parking REIT’s board estimated the share value at $11.75 as recently as June 2021, but even if that share value estimated was correct investors who paid $25.00 per share may have lost over 50% of their investment principal. Since 2015, the Vanguard Total REIT Index has experienced gains of approximately 40%, so why has the Parking REIT suffered such devastating losses?
The Parking REIT, which was formerly known as MVP REIT II, was a speculative and high risk investment. A broker conducting reasonable due diligence required by the rules and regulations should have understood this fact, and brokers and advisors who failed to conduct due diligence, misrepresented the investment, or unsuitably recommended the Parking REIT to their clients may be held liable for losses suffered. The Parking REIT was subject to a variety of significant risks which made it a speculative and high risk investment that:
- Shares of The Parking REIT were illiquid and could not be easily sold (if they could be sold at all).
- The $25 offering price for shares of the Parking REIT was set arbitrarily.
- The Parking REIT was a “blind pool” meaning it had no operating history and had not even identified any investments it would make which would not allow investors or advisors to evaluate the investments before buying them.
- The Parking REIT disclosed “substantial conflicts of interest” regarding compensation, investment opportunities and management resources among our advisor, our sponsor, our affiliated selling agent and us.
- The Parking REIT was permitted to incur substantial debt, which further increases risk.
In addition, the Parking REIT paid significant commissions to brokers who sold the REIT to their clients. Between Selling Commissions, Due Diligence Fees, and Dealer Manager Fees, as much as 10% of the offering amount was paid in commissions and fees to brokers and broker dealers.
Investments in The Parking REIT were not suitable for all investors. Advisors who recommended their clients to investment in The Parking REIT or other similar investments may be liable for losses suffered by the clients. Under the FINRA Rules brokers and advisors are required to conduct reasonable due diligence and are only permitted to recommend investments that are suitable for the client’s risk tolerance and needs. Further, brokers are required to fully and accurately describe the risks and rewards of the investments they offer. Thus, brokers who misrepresent the investments, or recommend unsuitable investments may be liable for losses suffered.
If you suffered financial loss because your broker recommended The Parking REIT or any other similar programs to you, you may have a right to file a claim to recover your losses. The Securities and Business Litigation team at Levin, Papantonio, Rafferty, Proctor, Buchanan, O’Brien, Barr & Mougey, P.A. has handled claims involving non-traded REIT products and can help you recover your losses. Our firm was founded in 1955, we have more than 50 attorneys and 150 support staff. We charge you attorney’s fees only if we recover for you.
Call us today for a free case review: (800) 277-1193. You can also email attorney Michael Bixby directly at firstname.lastname@example.org or fill out an evaluation form on our website.
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