n April 14, 2020, the chairman of NorthStar Healthcare Income Inc sent a letter to their stockholders informing them that on April 7, 2020, NorthStar Healthcare’s Board of Directors suspended all repurchases under the existing share repurchase program effective April 30, 2020.
NorthStar Healthcare will not repurchase any shares as of April 30, 2020, including shares submitted for repurchase during the first quarter of 2020, unless and until NorthStar’s Board reinstates the share repurchase program.
NorthStar Healthcare Income Inc is a publicly registered non-traded real estate investment trust (“REIT”) that had already suspended monthly distribution payments to investors in February of 2019. NorthStar was formed to acquire, originate, and asset manage a portfolio of equity, debt and securities investments in healthcare real estate, raising some $2 billion between 2013 and 2018. They created a portfolio of over 650 properties.
According to the letter sent to the stockholders, Northstar’s Board claimed they determined to suspend the share repurchase program due to concerns surrounding the COVID-19 virus on NorthStar Healthcare. They claimed that it is difficult to accurately predict the full extent of the financial impact of the COVID-19 virus on NorthStar Healthcare Income Inc and its properties. The letter stated that it depends on the “extent and nature of exposure of residents and staff to COVID-19, the availability and timeliness of adequate tests, better access to supplies and the duration of the crisis, among other factors.”
The letter goes on to explain to the stockholders that after considering NorthStar Healthcare Income Inc‘s current financial condition, liquidity and capital needs, Northstar’s Board believed that suspending repurchases was necessary to ensure NorthStar Healthcare has sufficient liquidity to protect the health and safety of the residents and staff at its properties, and preserve long-term value for stockholders.
Due to the high risk involved in a non-traded REIT, broker/dealers are obligated to disclose the risks of this volatile product. Brokers must assess the investor’s experience, knowledge, age, suitability and risk tolerance. In this case, the NorthStar Healthcare investors have no more dividends and now the possibility of repurchasing is not available.
If you’ve suffered losses in NorthStar Healthcare Income Inc., due to the recommendations of your broker/dealer or financial advisor, contact Soreide Law Group and speak to an experienced securities lawyer at no cost regarding the possible recovery of your investment losses through a FINRA arbitration at: 888-760-6552.
Soreide Law Group works on a contingency fee basis and represents clients nationwide before FINRA.