Investors in the Behringer Harvard Strategic Opportunity Fund I were given news last week news that they likely never thought they would hear. Their investment, which many investors had purchased on the recommendation of brokers who characterized the product as a low risk, safe investment, is now underwater.
The Strategic Opportunity Fund I’s “liabilities are greater than its assets,” said Michael O’Hanlon, chief executive of the funds comprising Behringer Harvard’s opportunity platform, in an Aug. 26 story in Investment News.
First offered in 2005, the Behringer Harvard Strategic Opportunity Fund I raised $65 million and invested in six properties, including an office building in Amsterdam and a hotel on Wilshire Boulevard in Los Angeles.
Non-traded real estate investment trust (REITs) like the Strategic Opportunity Fund have encountered a number of problems over the past year. Among them: Disclosure issues, high front-end fees of sometimes up to 15%, complex fee structures, lack of a secondary market, and restrictions or suspensions of distributions.
Maddox, Hargett & Caruso, P.C. currently is investigating claims by investors who suffered significant losses in the Behringer Harvard Strategic Opportunity Fund I, as well as in other non-traded REITs. If you have a story to tell regarding your experiences, please contact us.