BSP Realty Trust, formerly known as Realty Finance Trust, is promoted as “a publicly-registered, non-traded real estate investment trust (REIT) that originates, acquires, and manages a diversified portfolio of commercial real estate debt secured by properties located in the United States.”
Because it does not currently trade on an exchange, BSP is even less liquid than other REITs that trade on open exchanges. Brokers and financial advisors who sold BSP to investors may have downplayed or misrepresented the risks and liquidity problems of non-traded REITs.
The initial public offering (IPO) price of BSP Realty Trust was $25 per share, but that valuation has plummeted. By the end of 2019, the price per share was $18.57, and now it has dropped to $10.50. To make matters worse, distribution reinvestment and stock purchase plan (DRIP) was suspended by the Benefit Street Partners Realty Trust board in March 2020.
This price drop harms investors, many of whom were not aware of the risks involved in BSP. According to the SEC, among the risks posed by non-traded REITs are:
The securities law firm of Peiffer Wolf Carr Kane & Conway (Peiffer Wolf) is currently investigating Benefit Street Partners Realty Trust and speaking with investors. If you invested in BSP Realty Trust, Contact Peiffer Wolf for a FREE CONSULTATION by calling 585-310-5140 of by filling out a Contact Form on this website.
“As companies don’t typically model in months of little to no revenue, investors are forecasting an increase in defaults, while balance sheets are unlikely to improve until the end of 2021. […]”
“There will be even more corporate challenges – companies may have too much debt or not enough liquidity to deal with the large revenue declines.”
(Ray Costa, managing director and portfolio manager at Benefit Street Partners; Yahoo! Money, 8/28/2020)
*BSP Realty Trust is externally managed by Benefit Street Partners.
Brokers and financial advisors are often drawn to recommending REITs because of the high commissions associated with the transaction. These alternative investments are generally only suitable for savvy investors who are wealthy and sophisticated. These complex investment products are often highly illiquid, meaning investors may be stuck and not able to access their money. Moreover, many illiquid REITs cannot be freely sold in the marketplace. All too often, investors trying to exit or access their money are faced with two bad options: sell the shares directly back to the sponsor at a heavily discounted price or sell the shares for pennies on the dollar through the limited secondary markets.
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If you believe you were a victim of investment fraud or broker misconduct, it is imperative to take action. Peiffer Wolf has represented thousands of victims, and we remain committed to fighting on behalf of investors.