Soreide Law Group is reviewing possible investor claims against brokers or financial advisors who may have inappropriately recommended SmartStop Self Storage REIT Inc. (f/k/a Strategic Storage Trust II). Evidently, the board of directors of this non-traded REIT, which focuses on “stabilized self-storage facilities and related real estate investments,” announced that effective September 27, 2019, it will suspend its share redemption program. When this happens, most investors will not be able to redeem their holdings through the REIT. Here’s more on the latest news concerning SmartStop:
SmartStop To Suspend Share Redemption Program
SmartStop Self Storage REIT’s board of directors announced through an August 28, 2019 8-K SEC filing that it will suspend its share redemption program. The REIT initially put the program in place to allow shareholders to sell their shares back to the company. Evidently, SmartStop’s board of directors made the decision to focus on future business endeavors, strategic alternatives, and flexibility in operations. Unless investors who purchased the REIT are dead, disabled, or institutionalized and receiving long-term care, they will not be able to redeem their shares as of September 27, 2019. The REIT’s board of directors provided no indication of when the redemption program will resume if it resumes at all.
SmartStop Self Storage REIT, previously sponsored by SmartStop Asset Management, LLC, holds investor equity totaling $608,000,000. It owns at least 112 properties (over 71,000 storage units) as of June 30, 2019. The REIT merged with Strategic Storage Growth Trust Inc. in January 2019, acquiring all of Strategic’s Canadian-based storage facilities. In 2018, the REIT took over the property and asset management from SmartStop Asset Management LLC, effectively becoming self-managed. SmartStop Self Storage REIT is closed to new investors.
REIT Suitability Concerns
Non-traded REITs are not meant for certain investors including those who are inexperienced, need liquidity or want to invest conservatively. Specifically, investors who hold non-traded REITs may not be able to sell shares quickly enough in volatile market conditions. In some cases, it may not be feasible for investors to liquidate their non-traded REITs at all.
Unfortunately, some securities brokers and financial advisors omit or downplay risks of REITs like SmartStop Self Storage REIT while playing up the possibility of high returns to induce clients’ purchases. These financial professionals are required to inform investors of all important investment information, such as illiquidity risks. Moreover, FINRA rules prohibit brokers and advisors from recommending REITs or other investments which do not align with their clients’ financial needs, risk tolerance and goals. Investors who purchased unsuitable or misrepresented REITs from their broker or financial advisor may be able to recover their losses.
SmartStop Self Storage REIT Investor Loss Lawyer
Did you incur losses by investing in SmartStop Self Storage REIT? If so, contact Soreide Law Group at (888) 760-6552. Speak with experienced counsel about a possible recovery of your investment losses. Soreide Law Group represent clients on a contingency fee basis and advances all costs. The firm has recovered millions of dollars for investors who have suffered losses due to misconduct of brokers and brokerage firms.