NorthStar Healthcare is non-traded real estate investment trust (REIT). As such, it is only suitable for savvy and wealthy investors, because these complex investment products are often highly illiquid, meaning investors may be stuck and not able to access their money. However, when NorthStar Healthcare completed its initial public offering in 2015/2016, brokers and financial advisors started to recommend the NorthStar Healthcare Income Fund REIT to many clients who now have suffered significant losses.
NorthStar Healthcare, sponsored by Colony Capital, Inc. manages a “diversified portfolio of equity, debt and securities investments in healthcare real estate, directly or through joint ventures, with a focus on the mid-acuity senior housing sector.” In other words, it is made up of properties in the healthcare industry (real state) and retirement homes. Drawn to recommending this REIT because of the high commissions associated with the transaction, brokers and financial advisors made unsuitable recommendations to many clients who lost a lot of money.
If you invested in NorthStar Healthcare REIT, Contact Peiffer Wolf for a FREE CONSULTATION by calling 585-310-5140 or by filling out a Contact Form on this website.
NorthStar Healthcare REIT 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 period of time, 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 has begun another investigation into any and all brokers and advisors who recommended NorthStar Healthcare REIT to investors. If you invested in NorthStar Healthcare REIT, Contact Peiffer Wolf for a FREE CONSULTATION by calling 585-310-5140 or by filling out a Contact Form on this website.
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 NorthStar Healthcare REIT 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.