Soreide Law Group is reviewing potential complaints or lawsuits against financial advisors who might have recommended Oaktree Real Estate Investment Trust (Oaktree REIT). Notably, Oaktree REIT is a risky, non-traded real estate security which might be inappropriate for certain investors’ investment portfolios. Here’s more about the REIT and what you could do if you invested in the non-traded REIT at the direction of your financial advisor.
What Is Oaktree REIT?
First of all, Oaktree Capital Management – a global alternative investment management firm – sponsors Oaktree REIT, which is comprised of private real estate for the income-oriented investor. Mainly, the REIT aims to provide stable income and risk-adjusted total returns through investing in commercial real estate and other real estate debt opportunities within the United States.
Oaktree REIT has offered four share classes so far: D, S, T and I. Shares are currently valued between $10.43 and $10.46 depending on the class. That price represents the transaction price for each share class of common stock for subscriptions accepted as of November 1, 2020 and for repurchases as of October 31, 2020.
Risks Of Investing In The REIT
Critically, Oaktree REIT involves a high level of risk. First of all, there is no guarantee that Oaktree REIT will pay any specified distribution amount. Rather, the board of directors is at liberty to stop making distributions. Even if distributions occur, it is possible that the funds to pay distributions will not come from cash acquired in operations but instead through the return of invested capital.
Secondly, there is no guarantee as to the diversification of Oaktree REIT. Without diversification, the value of Oaktree REIT could face a crippling blow from volatility in the real estate sector. Finally, there is no guarantee as to the REIT actually achieving stated objectives or preventing losses from occurring.
Thirdly, investing in a non-traded REIT means that you may not be able to sell your shares when you want. With no public trading market, the only way that Oaktree likely allows you to dispose of your shares is through Oaktree repurchasing shares from you. Suppose that the real estate market gets rattled and you now wish to redeem your shares. You might not be able to do so before a reduction in value.
Financial Advisors Making Unsuitable Recommendations
You might be an investor who wishes to generate income. However, investing in Oaktree REIT presents unique risks compared with traditional mutual funds. It is the responsibility of your financial advisor to ensure that the recommendations they make are suitable for you. It is also incumbent on financial advisors to disclose risks of investing in aggressive investments like Oaktree REIT. Unfortunately, some financial advisors overlook their obligations and instead focus on the high commissions that they stand to earn by selling you these products.
Losses On Oaktree REIT?
Did you suffer losses by purchasing Oaktree REIT from your securities broker or financial advisor? If so, contact Soreide Law Group at (888) 760-6552 and speak with experienced counsel about a possible recovery of your investment losses. Soreide Law Group represents clients on a contingency fee basis and advances all costs. The law firm has recovered millions of dollars for clients who have suffered losses due to misconduct of brokers and financial advisors.