American Finance Trust (Nasdaq: AFIN), an externally managed REIT, has poorly performed causing serious concerns for investors. AFIN closed at $11.62 per share on May 24, 2019. This price is more than 50% less than the $23.56 estimated NAV which American Financial Trust stated in its June 2018 Listing Presentation.
AFIN, which emphasizes its management and acquisition of a service-focused tenant portfolio, contains approximately 560 properties. Currently, this REITs properties include lifestyle centers, offices, power centers, distribution and single tenant retail. Indeed, nearly three-fourths of AFIN’s properties are retail. Initially, American Finance Trust was a non-traded REIT selling for $25.00 per share. Evidently, liquidity concerns drove American Finance Trust's decision to become listed. Investment bank Robert A. Stranger & Co. Inc. referred to the AFIN Nasdaq listing as a “belly flop.”
Evidently, there are numerous red flags with AFIN which investors should consider. First, AFIN could face serious consequences from a possible SunTrust – BB&T merger. Evidently, the REIT has a large degree of exposure to SunTrust in its portfolio, and a merger could result in vacancies. Secondly, AFIN assumes higher risk in purchasing properties containing higher cap rates because of the REIT’s high cost of capital. Finally, the REIT’s payout ratio exceeds 100%, which is problematic because it leaves little room for the company to absorb financial setbacks. Mounting financial pressures could cause AFIN to cut its dividend in the future. Therefore, it is unwise for investors to bank on AFIN’s high yields.
Occasionally, brokers and advisors attract investors to REITs because investors can generate returns from real estate without having to buy property. However, some brokers mislead investors regarding REIT risks and costs of investing. Particularly, shady brokers downplay the risks of volatility and the lack of diversification in REIT portfolios. They may also misrepresent or omit information concerning their commissions. Because of this, unsophisticated investors with conservative objectives sometimes fail to realize the true extent of the risks until they have already incurred serious losses. Fortunately, investors can sue their brokers or financial advisors who sell unsuitable investments or who misrepresent the features and risks of REITs.
Soreide Law Group is evaluating claims of unsuitability and misrepresentation with respect to brokers’ AFIN sales. Did your broker or advisor inappropriately sell you AFIN or other another REIT causing you losses? If so, contact Soreide Law Group at (888) 760-6552 and speak with experienced counsel about a possible recovery of your losses. Soreide Law Group represents clients nationwide and only charges a fee upon the recovery of losses.
On August 6, 2026, a customer filed a $400,000 FINRA arbitration naming Chad McQuade (CRD 5436281) and Northwestern Mutual. The claim involves outside, third-party real estate investments. It is pending, and McQuade disputes it in a written response.
Christopher Miller (CRD 4044818) has a customer dispute on BrokerCheck that settled on October 7, 2026 for $50,901. The disclosure lists Emerson Equity as the firm.
A customer dispute that settled for $80,000 on July 16, 2026 is the newest entry on the BrokerCheck report of Stephen Kerutis (CRD 2345517). The clients in that matter alleged unsuitable recommendations, and Truist Investment Services is the firm on the disclosure.
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