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Maddox Hargett & Caruso, P.C. is investigating claims on behalf of investors who contend they were misguided by Ameriprise Financial to make investments in non-traded real estate investment trusts (REITs). Many of these investors had little or no previous investing experience and, as a result of their investments in non-traded REIT products, lost much of their financial savings.
Non-traded REITs have encountered a number of problems recently, including transparency issues, inaccurate valuations, hefty front-end fees of up to 15%, complex fee structures, lack of a secondary market, and restrictions or suspensions on distributions.
One example of a non-traded REIT in trouble is Behringer Harvard Holdings LLC’s Behringer Harvard Strategic Opportunity Fund I. In the summer of 2012, investors were informed that the REIT was essentially “under water,” with its debt outweighing its equity.
Another Behringer REIT, the Behringer Harvard Opportunity REIT I, saw its estimated value decline 46% to $4.12 a share from $7.66 a year earlier. In June of last year, one property in that REIT entered into bankruptcy protection.
Similar circumstances happened to the Behringer Harvard Short-Term Opportunity Fund I LLP, which had approximately $130 million in assets when it saw its valuation drop to 40 cents a share this past summer from $6.48 a share as of Dec. 31, 2010.
If you have suffered financial losses in non-traded REITs because of what you believe to be unsuitable recommendations by Ameriprise Financial or another broker/dealer firm, please contact us.