Soreide Law Group is currently reviewing potential claims on behalf of investors who purchased Lodging Fund REIT III through brokers and financial advisors. This investment, a non-traded real estate investment trust, has drawn scrutiny for regulatory issues and reporting delays. Investors should be aware of the risks tied to this product and may have options for recovering losses. The sections below provide an overview.
What is Lodging Fund REIT III?
Lodging Fund REIT III is a non-traded real estate investment trust that pools investor money to acquire and manage hotel properties across the United States. Unlike publicly traded REITs, its shares are not listed on major exchanges, which makes them difficult to sell and limits liquidity. The fund has relied on both investor capital and financing arrangements, such as credit facilities, to support operations and property acquisitions. By design, it aims to generate income and potential appreciation through hospitality sector investments.
Concerns About Lodging Fund REIT III
Lodging Fund REIT III has been connected to troubling findings by federal regulators. According to the Securities and Exchange Commission, the fund and affiliated companies allegedly improperly shifted roughly $5 million in overhead expenses to investors, despite offering materials stating those costs would remain with the advisors. In 2025, the SEC announced the creation of a Fair Fund, worth more than $4.7 million, to return money to impacted shareholders. On top of these compliance issues, the company has struggled to keep current with financial reporting, filing annual and quarterly reports months after deadlines. Combined with the challenges of the hospitality market and the illiquid nature of non-traded REITs, these concerns highlight substantial risks for investors.
Sales Practice Violations
Many investors may also have been affected by sales practice violations tied to the recommendation of this product. Examples include unsuitable sales to investors with limited risk tolerance, brokers failing to disclose the high upfront fees and long-term illiquidity, or misrepresentations about the safety and income potential of the investment. Securities firms have an obligation to conduct adequate due diligence and ensure any recommendation aligns with a client’s financial goals and risk profile. When they fail to meet these standards, investors may pursue claims through FINRA arbitration or other legal channels.
Did You Sustain Losses By Investing in Lodging Fund REIT III?
Did you experience losses because of investing in Lodging Fund REIT III because of your financial advisor or securities broker? If so, reach out to Soreide Law Group online or at (888) 760-6552 and talk with a securities attorney concerning a potential recovery of your investment losses. Soreide Law Group has recovered losses for investors throughout the United States. The firm works on a contingency fee basis and advances all costs.
