Soreide Law Group is currently investigating claims from investors who have experienced financial losses due to the recommendations of their broker/dealers or financial advisors in the purchase of shares of the non-traded Real Estate Investment Trust (non-traded REIT), Watermark Lodging Trust. On April 13, 2020, Carey Watermark Investors 1 and Carey Watermark Investors 2 merged into Watermark Lodging Trust. It may be that this and other non-traded REITs were sold to investors without their knowledge of the risks involved and/or the problems with liquidity.
Watermark Lodging Trust, disclosed on June 30, 2020, that the suspension of its share redemption program and distributions will remain in effect until further notice.
Distributions and redemptions were suspended in March due to the reduction in travel and lodging demand and financial impact, resulting from the COVID-19 pandemic, according to the company. In May, the company delayed their financial filings due the unpredictability of the pandemic and to the suspended operations in approximately half of their hotels and reduced staffing levels at the remaining properties.
“Even when all of our hotels are able to reopen, we expect demand for our hotels to recover slowly and over time until the spread of the virus, the fear of its spread and government-imposed quarantines and restrictions on travel and large gatherings subside,” the company said in a May 2020 filing with the SEC. “In addition, the company expects to have to reconfigure the layout of its properties, add cleaning services and systems and take other steps to seek to address customer concerns, which will require the company to incur expenditures which may be material.”
Carey Watermark Investors 2 originally sold their shares for $10.00. Secondary market trading sources say that Carey Watermark Investors 2 has substantially dropped in value. In August, shares were listed at $3.75.
Brokers and financial advisors have an obligation to their clients to make sure they understand the risks involved in non-traded REITs such as Watermark Lodging Trust. Non-traded REITs are much more complex than traditional investments, and are not for the conservative investor. There are also high commissions for the brokers, and these non-traded REITs lack liquidity. If an investor needs to sell, they may have problems not only finding a buyer but may in turn take a significant loss on their initial investment.
If your broker/dealer or financial advisor recommended purchasing shares of Watermark Lodging Trust, or any other non-traded REIT, and you suffered financial losses, 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 and represents our clients nationwide before FINRA.