Soreide Law Group is investigating potential investor claims involving sales practice violations committed by securities brokers and financial advisors. One investment product that has raised serious concerns for many investors is Moody National REIT II, a non-traded real estate investment trust that concentrated its portfolio in the hospitality sector. In light of recent events, investors face troubling news about the company’s financial condition and liquidation efforts. The following sections outline what this investment is, why concerns have emerged, and how investors may be able to pursue recovery options.
Moody National REIT II was created and sponsored by Moody National, a Houston-based real estate investment company. The trust was designed to purchase, operate, and manage hotel properties across the United States. Because it was structured as a non-traded REIT, shares were sold directly to investors without being listed on a public stock exchange.
Non-traded REITs like Moody National REIT II are marketed as opportunities for ordinary investors to participate in commercial real estate without the volatility of public markets. However, these products are typically illiquid, meaning investors cannot easily sell shares. The limited redemption programs often come with restrictions, and if investors try to sell shares on secondary markets, they are frequently forced to accept deep discounts from the original purchase price.
Moody National REIT II has allegedly faced financial challenges over the past several years. Since around April 2020, the company reportedly suspended both investor distributions and its share redemption program, which may have eliminated two of the main ways investors could attempt to recover funds. In April 2025, the board of directors is said to have approved a plan to liquidate and dissolve the REIT, with a shareholder vote reportedly scheduled for September 30, 2025.
Leading up to this vote, the trust allegedly began selling certain hotel properties to generate cash. Some sales appear to have been completed at values lower than their reported original purchase prices. For instance, it has been stated that in 2025 the Embassy Suites Nashville sold for approximately $57.5 million after allegedly being acquired for about $66.3 million, while the Residence Inn Austin reportedly sold for $20.5 million compared to an earlier purchase price of $27.5 million. It has further been claimed that the Hilton Garden Inn Austin was lost to foreclosure in May 2025 to satisfy debt obligations.
Observers have alleged that the financial outlook for investors worsened as the reported net asset value (NAV) per share fell from about $19.45 at the end of 2022 to roughly $17.25 by mid-2024. On the secondary market, shares have reportedly sold for as little as $8.25—an apparent decline from the original offering price of $25. These developments could be interpreted as reflecting both declining property values and significant debt burdens. As of March 2024, it was alleged that more than one-third of the REIT’s $228 million in debt was set to mature by year-end, which may have placed additional strain on operations.
While market and operational issues contributed to Moody National REIT II’s struggles, many investors are also questioning whether the product was ever suitable for their portfolios. Securities brokers and financial advisors are legally obligated to recommend investments that match an investor’s age, income, experience, goals, and risk tolerance. With non-traded REITs, red flags often arise because of their illiquidity, high fees, and risk profile.
Potential sales practice violations connected to Moody National REIT II include:
If brokers or advisors failed in their duty, investors may have legal options. Claims can often be pursued through FINRA arbitration, which provides a forum to recover losses from the firms that recommended unsuitable products.
Did you experience losses because of investing in Moody National REIT II 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.
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