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Investors Want Answers Over Inland Western REIT IPO

Investors who put their money into Inland Western REIT are just realizing the extent of losses they’ve actually suffered. That’s because the non-traded real estate investment trust (REIT) just went public, giving investors a first-time look at its true worth.

In April, the initial public offering price was set at $8 a share for the Inland Western REIT, now known as Retail Properties of America. The price was well below the expected $10 to $12 pre-offering price. Moreover, some highly complicated reverse-stock-split engineering was required to even reach the $8 mark.

For investors who initially purchased the investment at $10 share a decade ago, the split-adjusted value of their investment following the IPO is less than $3. In other words, those investors lost some 65% of their original investment.

In another unexplained move, Retail Properties decided to offer only a quarter of the shares during Inland Western’s initial public offering. Three follow-up stock sales are planned over the next 18 months.

After the IPO, company president and chief executive Steven Grimes stressed in a letter to shareholders the impact of the economic recession on the real estate industry.

“It is uncertain if and when we will see a full recovery,” he states in the letter.

If you’ve suffered losses in Inland Western/Retail Properties of America, tell us your story. Maddox Hargett & Caruso currently is investigating unsuitable sales of non-traded REITs, including Inland Western, Inland American and Behringer Harvard REIT I.


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