As the lawyers at Peiffer Wolf Carr Kane & Conway have long suspected, it was recently revealed to investors of Moody’s REIT II that the long-stated NAV share price of $23.50 was a fallacy. Moody’s board of directors announced on March 31, 2021 in its annual report that it could no longer set an accurate estimated share value. As a result, investors who have long believed their holdings were worth $23.50/share were shocked to open their April 2021 account statements to find it listed as N/A. In other words … $0.
Moody National REIT II is another stark reminder of how disastrous non-traded REITs can be for investors. According to the US Securities and Exchange Commission, “[b]ecause they do not trade on a stock exchange, non-traded REITs involve special risks”.
They are illiquid investments, which means that “if you need to sell an asset to raise money quickly, you may not be able to do so with shares of a non-traded REIT.” Moreover, “it can be difficult to determine the value of a share of a non-traded REIT. Non-traded REITs typically do not provide an estimate of their value per share until 18 months after their offering closes. This may be years after you have made your investment. As a result, for a significant time period, you may be unable to assess the value of your non-traded REIT investment and its volatility.”
Financial advisors (brokers) have a legal obligation and regulatory obligation to recommend only suitable investments that are appropriate for their individual clients. Their broker-dealer (employing brokerage firm) has a legal obligation and regulatory obligation to supervise the financial advisor’s sales practices and dealings with clients. To the extent that any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.
Thus, the securities law firm of Peiffer Wolf Carr Kane & Conway (“Peiffer Wolf”) has begun another investigation into any and all brokers and advisors who recommended Moody National REIT II to investors. If you invested in Moody National REIT II, Contact Peiffer Wolf for a FREE CONSULTATION by calling 585-310-5140 or by filling out a Contact Form on this website.
Moody National REIT II Inc operates as a real estate investment trust. The Company invests in hotels and other properties. Moody National REIT II serves customers in the United States. (Bloomberg)
On February 24, 2021, Moody’s CFO, Robert W. Engel, registered a request for “the withdrawal of the Post-Effective Amendment on the grounds that the public offering of the Company’s securities remains indefinitely suspended” with the SEC.
More recently, Moody National REIT II changed their estimated value from $23.50 to “N/A.” Investors opening account statements in May 2021 saw their account’s value plummet based on a $0 value for Moody National REIT II. Peiffer Wolf represents investors who recently realized they lost hundreds of thousands of dollars investing in Moody National REIT II.
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.
If you believe you lost money because of unsuitable recommendations, including the addition of Moody National REIT II 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.