NAPLES, Fla., Oct. 4, 2011 (GLOBE NEWSWIRE) -- The Vernon Healy law firm issued results today from its on-going investigation that shows troubling risks for investors in non-traded REITs like those outlined in an investor alert issued today by the Financial Industry Regulatory Authority.
The Vernon Healy report highlights the plight of investors trapped in illiquid non-traded REIT investments and facing stiff losses: low-ball offers from third parties who target non-traded REITs like KBS REIT I and Behringer Harvard REIT I.
Vernon Healy, an investor rights law firm, is currently representing investors nationwide who have collectively suffered millions of dollars in REIT losses in non-traded REITs like Behringer Harvard, KBS, Desert Capital, Inland, Wells, and others. Click here to see the Vernon Healy report and call 239-649-5390 to contact investor rights attorney Chris Vernon for an interview.
Vernon Healy cites the Behringer Harvard REIT I, which commenced its public offering in 2003, as an example of the stiff losses and illiquidity that investors can suffer in a non-traded REIT.
According to the Vernon Healy analysis, Behringer Harvard REIT I repriced its shares in May 2010 from $10 per share to $4.25 per share – a stunning decline of more than $1.4 billion in investor value. Behringer Harvard REIT I suspended redemptions indefinitely on March 31, 2009, leaving investors effectively stuck with the soured investment.
The Vernon Healy report also takes aim at the practice in which Behringer Harvard REIT I effectively used new investors' money or borrowed funds to pay prior investors from 2004 to 2008, as disclosed in the respective Behringer Harvard REIT I annual reports on file with the Securities and Exchange Commission. In its 2008 annual report, Behringer Harvard REIT I disclosed that "none of the distributions….were distributions from the taxable earnings of real estate operations."
According to a Vernon Healy analysis of the 2003 Behringer Harvard REIT I offering, only slightly more than 80 percent of the initial funding was actually available to be invested in real estate. In other words, the investors' money had been diluted by approximately 16 percent before any monies were invested in real estate, according to Vernon Healy report.
The report takes aim at other fees that Behringer Harvard REIT I has the right to collect: 4 percent of the gross property management fee and leasing fees, 3 percent of the total transactional value each time the REIT acquires or sells a property. In addition, Behringer advisors would be entitled to up to 10 percent of the entire net asset value of the REIT were it ever to go public.
The securities attorneys at Vernon Healy represent investors nationwide who are victims of securities fraud. Vernon Healy has conducted nationwide investigations of structured products, reverse convertibles, fixed income products, bond funds, hedge funds, non-traded REITS.