brokerwatch

MacKenzie REIT Investigation | What happened?

MacKenzie Capital Management, MacKenzie REIT’s parent company, specializes in alternative investments, backed by discounted real estate securities. MacKenzie REIT is a non-traded, private placement investment, meaning MacKenzie Capital Management can sell the investment without having to register the REIT with the SEC. These types of investments are often riskier and more complicated than traditional investments, and are only suitable for high net worth, sophisticated investors. Brokers and financial advisors are often drawn to recommending REITs because of the high commissions associated with the transaction as the up-front commission can range from 7-10 and additional “due diligence fees” can range from 1-3%.

MacKenzie REIT prices have fallen, following the suspension of its share repurchase program in May 2022. MacKenzie stated this suspension occurred because the value of assets “owned and sought by the company” have declined. The potential inability to trade and liquidate shares, as well as elimination of dividends, has translated into major financial losses for many MacKenzie REIT investors.

Brokerage firms are required to perform adequate due diligence on any investment they recommend and to ensure that all recommendations are suitable for the investor in light of that particular investor’s age, investment experience, net worth, risk tolerance, investment objectives, and income. Most major brokerages do not sell the high cost Non-Traded REITS, which are typically marketed by third-tier independent brokerage firms. Firms that fail to perform adequate due diligence or that make unsuitable recommendations can be held responsible for investment losses in a FINRA arbitration claim.

If you invested in Mackenzie REIT, Contact Peiffer Wolf for a FREE Consultation by calling 585-310-5140 or by filling out a Contact Form on this website.

MacKenzie REIT Investigation | The problems with REITs

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, because they are complex investment products that 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.

If you believe you lost money because of unsuitable recommendations, including the addition of REITs to your portfolio, it is important to take action. Peiffer Wolf has represented thousands of victims, and we remain committed to fighting on behalf of investors.