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TAG | Cornerstone Core Properties REIT

Apr/12

30

Have You Invested In These REITs?

Comments off · Posted by Securities Lawyer in FINRA

Soreide Law Group, PLLC, is investigating the following REITs (Real Estate  Investment Trust), of which some may have recently seen a steep devaluation.  This is a list of current and available REITs that may be under review for our clients.

American Realty Capital Daily Net Asset Value, Inc.

ARC Retail Centers of America

ARC Healthcare Trust

American Realty Capital Trust, Inc.

American Realty Capital New York Recovery REIT

ARC Property Trust, Inc.

Arciterra National REIT, LP

Behringer Harvard Multifamily REIT II, Inc.

Bluerock Enhanced Multifamily Trust, Inc.

Carter Validus Mission Critical REIT

Clearwater Opportunity REIT

Cornerstone Core Properties REIT, Inc.

Hines Global REIT, Inc.

Inland Diversified REIT

Lightstone Value Plus REIT II

O’Donnell Strategic Industrial REIT, Inc.

Preferred Apartment Communities, Inc.

US Apartment Investors 2010, Inc.

Wells Core Office Income REIT

Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients nationwide. If you or a family member have sustained investment losses due to your stock broker or financial advisor’s recommendations of these or other REITs, call for a free consultation on how to potentially recover your losses. To speak with an attorney call 888-760-6552, or visit our website at: www.securitieslawyer.com.

Soreide Law Group, PLLC., representing investors nationwide before FINRA the Financial Industry Regulatory Authority.

 

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Apr/12

30

Did You Invest in Cornerstone Core Properties REIT?

Comments off · Posted by Securities Lawyer in FINRA

Soreide Law Group, PLLC, has been conducting investigations into several REITs.  Cornerstone Core Properties REIT was at one time valued around $8.00 per share.  If you were an investor at that price, you have now seen that value tumble to its current approximate value of $2.25.  This non-traded Real Estate Investment Trust has suffered a sharp decline in tenant occupancy.  It was 69% at the end of 2011 and 92% as 2008 came to an end. Additionally, this REIT was prevented from raising necessary capital for funding due to alleged regulatory issues.

The Financial Industry Regulatory Authority, also know as FINRA, has been closely monitoring the sale of non-traded REITs and how those products were marketed.  REITs have occasionally been marketed as safe investments by certain broker/dealears when in fact they are often illequid and extremely risky to the investor.

Securities lawyer, Lars K. Soreide, of Soreide Law Group is currently investigating any alleged improper marketing to the clients by their financial advisors or broker/dealers.  If you feel you have incurred losses through your purchase of Cornerstone Core Properties due to your stock broker or financial advisor’s recommendations, call for a free consultation on how to potentially recover your losses. To speak with an attorney call 888-760-6552, or visit our website at: www.securitieslawyer.com.

Soreide Law Group, PLLC., representing investors nationwide before FINRA the Financial Industry Regulatory Authority.

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Apr/12

24

Nontraded REITs on the Slide

Comments off · Posted by Securities Lawyer in FINRA

Have you invested in these  non-traded real estate investment trusts and funds that have recently seen steep devaluations?Name         Offering price      Per share Current estimated value       % decline per share  Behringer Harvard Opportunity REIT I          $10.00      $4.12           -58.80%       Behringer Harvard REIT I                                     $10.00     $4.64           -53.60%       Behringer Harvard Short-Term Opportunity Fund $10.00     $0.40          -96%       Cornerstone Core Properties REIT                     $8.00        $2.25           -71.88%       Inland Western Retail Real Estate Trust Inc.   $10.00     $6.95           -30.50%       KBS Real Estate Investment Trust Inc.               $10.00      $5.16           -48.40%   Source: SEC filings Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients nationwide. If you or a family member have sustained investment losses due to your stock broker or financial advisor’s recommendations, call for a free consultation on how to potentially recover your losses. To speak with an attorney call 888-760-6552, or visit our website at: www.securitieslawyer.com. Soreide Law Group, PLLC., representing investors nationwide before FINRA the Financial Industry Regulatory Authority.      

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Apr/12

20

Cornerstone Core Properties Plunges 72%–Another Nontraded REIT

Comments off · Posted by Securities Lawyer in FINRA

Bruce Kelly writes in an InvestmentNews.com article, that another nontraded real estate investment trust has taken a sudden and precipitous decline in value — this time plunging nearly 72%.

The investors in the Cornerstone Core Properties REIT Inc. were told this month by the company that the shares, once valued at $8, are now worth $2.25. “The estimated per-share value has been adversely affected by the recent global economic downturn, negatively impacting our small business tenant base, which has resulted in approximately $43 million of previously announced impairment charges recorded in the second and third quarters of 2011,” according to the letter, which was signed by Terry Roussel, the REIT’s chairman and chief executive.

Kelly writes that a sharp decline in tenant occupancy has hammered the REIT: Tenant occupancy of the REIT’s retail properties was 69% at the end of last year, compared with 92% at the end of 2008. “A couple of years ago, the sponsor had some regulatory issues and had to shut down capital raising,” said Anthony Chereso, CEO of FactRight LLC, a due-diligence firm that covers managers of alternative investments. “It had some properties with tenant issues, and the portfolio had issues with covering debt and distributions. It was not constructed well.” FactRight last year recommended that broker-dealers pull the Cornerstone Core Properties REIT from their platforms, Mr. Chereso said.

These REIT’s regulatory issues had to do with marketing at the sponsor level, Mr. Chereso said. The sponsor broker-dealer is Pacific Cornerstone Capital Inc. “Their only option is to liquidate,” he said. “There’s not a whole lot that can be done to revive it.”

Kelly writes the Cornerstone REIT raised only $172.7 million between 2006 and 2009, making it a relatively small player in a marketplace in which the largest players have raised and deployed billions of dollars. Still, other nontraded REITs or real estate funds sold by REIT sponsors recently have seen dramatic declines in value, eating away at investors’ portfolios and making life difficult for the brokers who sold the products.

By the end of December, investors in the Behringer Harvard Short-Term Opportunity Fund I LP, which had about $130 million in total assets, saw its valuation drop to 40 cents a share, down drastically from $6.48 a share Dec. 31, 2010, and the Behringer Harvard Opportunity REIT I Inc. saw its estimated value decline to $4.12 a share at the end of last year, from $7.66 a year earlier.

The Cornerstone Core Properties REIT changed its chief financial officer at the end of last year, replacing Sharon Kaiser with Stephen Robie, according to filings with the Securities and Exchange Commission.

In conclusion of the InvestmentNews.com article, Kelly writes that the REIT has been focused on paying down debt, selling three properties in the fourth quarter of 2011 with $24.8 million in sales value. The proceeds were used to pay down $13.5 million of debt and to build cash reserves, according to an SEC filing.

Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients nationwide. If you or a family member have sustained investment losses due to your stock broker or financial advisor’s recommendations, call for a free consultation on how to potentially recover your losses. To speak with an attorney call 888-760-6552, or visit our website at: www.securitieslawyer.com.

Soreide Law Group, PLLC., representing investors nationwide before FINRA the Financial Industry Regulatory Authority.

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Apr/12

17

A Word of Caution When Buying REITs

Comments off · Posted by Securities Lawyer in FINRA

In an InvestmentNews.com article by Bruce Kelly, April 1, 2012, he writes that shortly after Susan Fox bought a nontraded real estate investment trust for her IRA, the REIT started to show quarterly losses. But when she met with her broker to discuss her concern, he sold her a second nontraded REIT.

Kelly writes that the first REIT, Inland American Real Estate Trust, has fallen in value in the last five years from $10 per share to $7.22 per share, a 28% decline. Last month, Ms. Fox, 63, was informed that the second, Cornerstone Core Properties REIT Inc., had been devalued to $2.25 per share, from $8, a drop of 72%. Ms. Fox claims that after watching the first REIT’s performance decline, she never intended to buy the second one.

The InvestmentNews.com article goes on to say that Ms. Fox, who was living in Plano, Texas, when she bought the REITs and now resides in Ramsey, Ill., sensed trouble in the summer of 2008 when the Inland REIT started to post losses. So she and her broker, John Potts, met at her home to discuss what to do with her IRA. During their conversation, Mr. Potts was squarely focused on the Cornerstone REIT, Ms. Fox said.

“I was concerned with Inland performing so poorly, and he sold me Cornerstone,” said Ms. Fox, who claims she did not know the investments were illiquid when she bought them.

“My recollection was that he deflected talking about Inland,” she said. “He was talking over my head and said that [Cornerstone] was a better investment with a better, reputable company, and it would pay dividends. He had a lot of paper spread out on the table. He had all the documents ready for me to sign, and I signed them.”

Kelly writes that she knew Mr. Potts and had worked for him, doing some bookkeeping for his firm, Signature Planning Inc., and was “impressed with his due diligence,” she said. During the real estate boom, such REITs were regularly touted as being stable, long-term investments because they invested in commercial real estate, which historically had performed well as an asset class. As some REITs’ values have plunged the opposite has proved true.

The REIT industry often puts the blame squarely on the real estate bubble rather than on any individual real estate investing strategy.

Additionally in Ms. Fox’s predicament, the REITs were part of her IRA, which in 2008 had $105,000 in it. The REITs accounted for $56,616 of the account, or almost 54%. Having such a large percentage of her IRA in illiquid investments alarmed Ms. Fox, and in July 2010, she told her broker to sell the investments. When he told her she was stuck, she began to complain.

“I purport that I was overallocated to nonliquid investments unsuitable for my short-time-horizon needs,” she wrote in a letter in July 2010 to Thomas Berthel, CEO and owner of Berthel Fisher & Co. Financial Services Inc., an independent broker-dealer that employed Mr. Potts.

In 2010, Ms. Fox also complained to the Financial Industry Regulatory Authority Inc., which looked into the matter but took no action.

Ms. Brady said the firm concluded that Mr. Potts acted appropriately and that there were no sales practice problems with Ms. Fox’s transactions. “We remain confident that the sales practices of our registered representative were appropriate,” Ms. Brady wrote.

One question from Ms. Fox’s dilemma is the appropriateness of investing in illiquid instruments in retirement accounts.

Kelly writes that the direct-participation-program industry, which includes nontraded REITs and other investments, is trying to make the REITs more palatable for investors, including those with retirement accounts, by creating products that have daily net asset values and increased liquidity, industry observers said. Most nontraded REITs are given a value only once a year, and that is after they finish their period of sales. Securities regulators recently have proposed rules that would tighten up the time for valuations.

“There’s confusion in people’s minds between the extent of an investment being liquid and safe,” said Tony Webb, a research economist with the Center for Retirement Research at Boston College. “A five-year [certificate of deposit] is not liquid but safe. A publicly traded share is liquid but not safe.”

“Clearly, in the face of the uncertainty of health care costs, households place a certain value on liquidity, but it’s not important that all the household’s wealth is liquid,” Mr. Webb said.

“This is one where the adviser should be faulted, not that the investment wasn’t liquid but that the level of risk wasn’t appropriate for the client,” he said. “I don’t know the client’s financial situation, but it strikes me, at first glance, of being an inappropriate investment.”

The InvestmentNews.com article says that while no figures are available for the overall percentage of illiquid investments in retirement accounts, industry executives said they are widely sold. At independent broker-dealers such as Berthel Fisher, two of the most popular types of illiquid investments are nontraded REITs and the more recently developed nontraded business development companies, or BDCs.

Such investments yield income, which is appealing for the long-term investor, said Kevin Hogan, president of The Investment Program Association, an industry association for the broker-dealers that market and sell such investments.

“Most IRA accounts run for 10 to 20 years, and that fits the long-term nature of nonlisted REITs,” he said. “I think you’ll see more nonlisted REITs in IRAs because of income and distribution potential.”

Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients nationwide. If you or a family member have sustained investment losses due to your stock broker or financial advisor’s recommendations, call for a free consultation on how to potentially recover your losses. To speak with an attorney call 888-760-6552, or visit our website at: www.securitieslawyer.com.

 
Soreide Law Group, PLLC., representing investors nationwide before FINRA the Financial Industry Regulatory Authority.

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Jan/12

16

Have You Invested in These REITS?

Comments off · Posted by Securities Lawyer in FINRA

Soreide Law Group, PLLC, is currently investigating the following REIT investments. If your stock broker or financial advisor recommended any of the following investments, and you sustained a significant loss of your investment. call 888-760-6552 for a free consultation.

- REITS -
 
Medical Hospitality Group, Inc.
American Realty Capital Daily Net Asset Value, Inc.
ARC Retail Centers of America
American Realty Capital Trust III, Inc.
ARC Healthcare Trust
American Realty Capital Phillips Edison Shopping Center REIT
American Realty Capital Trust, Inc.
American Realty Capital New York Recovery REIT
ARC Property Trust, Inc.
Arciterra National REIT, LP
Behringer Harvard Multifamily REIT II, Inc.
Behringer Harvard 2008 Multifamily REIT I
Behringer Harvard Opportunity REIT II
Bluerock Enhanced Multifamily Trust, Inc.
Carter Validus Mission Critical REIT
Clearwater Opportunity REIT
Cornerstone Core Properties REIT, Inc.
Hines Global REIT, Inc.
Inland Diversified REIT
Lightstone Value Plus REIT II
NetREIT Dubose Model Home REIT, Inc.
O’Donnell Strategic Industrial REIT, Inc.
Preferred Apartment Communities, Inc.
US Apartment Investors 2010, Inc.
Wells Core Office Income REIT
Wells REIT II
Wells Timberland REIT
 
If you have sustained losses in any of these REIT funds due to your stock broker or financial advisor’s recommendation call 888-760-6552, or visit www.securitieslawyer.com.
 
Soreide Law Group, PLLC., representing investors nationwide before FINRA the Financial Industry Regulatory Authority.

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