New York City REIT (NYC) Losses?

Soreide Law Group has filed many claims from clients, and continues to do so, who have suffered devastating losses in New York City REIT Inc. (NYC), recommended by their brokers/dealers or financial advisors. NYC REIT is managed by the Nicholas Schorsch partnership, AR Global. NYC REIT has taken a huge hit in the weeks since it was listed on Nasdaq.  Investors have seen the value drop as much as a staggering 80% from the initial sales price.
According to a recent article in InvestmentNews, New York City REIT (NYC) was launched in 2013 as one of many non-traded real estate investment trusts (REITs) managed by AR Global. Several independent broker/dealers sold this high-commissioned REIT at the offering price of $25 per share. Often, these illiquid REITs may have been sold with the broker/dealer promise of high yields and a listing of shares, known as a liquidity event, that would allow investors to cash out their investment and receive back all or most of their principal.
New York City REIT (NYC), focuses on New York commercial real estate, started trading at $30 per share on Aug. 18. It closed that day at $17.60 and by the end of the month had fallen further, to $13.60 per share. In a 2.43-to-1 reverse split in July and its August listing, the REIT’s shares were trading at approximately 11.80, today, October 7, 2020.
The Investment News article goes on to say that Robert A. Stanger & Co., an investment bank and REIT watcher, claims that a client’s initial purchase in 2014 of 1,000 shares of New York City REIT (NYC) had a value of $25,000, and after the reverse stock split, the number of those shares was reduced from 1,000 to 412. Consequently, the client who invested $25,000 now has an investment worth approximately $5,000, a devastating decline of 80%.
Schorsch and AR Capital agreed to pay $60 million in penalties last year to settle Securities and Exchange Commission (SEC) charges that Schorsch, the firm and a partner wrongfully obtained millions of dollars in connection with REIT mergers that were managed by AR Capital, according to the news article.
For clients who were sold New York City REIT (NYC) by their broker/dealers without understanding the risks involved may file claims to recover the devastating losses they incurred. Brokers and financial advisors typically charged commissions of 7% for those sales, and firms received commissions of 1% to 2%.
Contact Soreide Law Group, currently filing many claims against broker/dealers who have recommended New York City REIT (NYC) to their clients, and speak to an experienced securities lawyer at no cost regarding the possible recovery of your investment losses at:  888-760-6552.
Soreide Law Group works on a contingency fee basis and represents our clients nationwide before FINRA.