According to the NorthStar Healthcare REIT website, the investment formed to initiate, acquire and manage equity and debt investments in healthcare real estate. NorthStar Healthcare requires that it is focused on investing in the needs-based senior housing sector, including independent living facilities, living, memory care and skilled nursing facilities. NorthStar Healthcare REIT launched in February 2013 and collected total gross receipts of $ 2 billion, including $ 225.3 million through its distribution reinvestment plan. The company claims that it has 652 properties of 652 properties in the third quarter of 2018.
NorthStar Healthcare Income Investigation
Securities fraud lawyers at Haselkorn & Thibaut are investigating proposals from brokering firms for their clients to invest in NorthStar Healthcare Income Inc. (NorthStar Healthcare) – a non-traded real estate investment trust (Non-traded REIT). According to news sources, NorthStar Healthcare has huge losses and may not be worth less than 30 cents per dollar purchased. Besides, NorthStar Healthcare no longer distributes a dividend – and there was only a return on the principal of investors and not funds from any business operations. As is common in the brokerage industry, firms do not understand the faulty non-traded REIT business model and only recommend these products to their 7% commission – not because they benefit investors.
According to The DI Wire, in December 2017, NorthStar Healthcare reduced its distribution rate from 6.67% to 3.31%. A year later NorthStar Healthcare reduced its joint-stock value from $ 8.50 per share to $ 7.10 per share. In addition, in October 2018, NorthStar Healthcare told shareholders that it was suspending its repurchase program – if the shareholder was not dead or had a qualified disability.
However, these valuation metrics are in serious doubt. Firstly, by NorthStar Healthcare disclosures, the company did not pay any return on investment in three years and instead only took the investor’s original investment capital with huge loans to return these funds. Accordingly, NorthStar Healthcare’s financial affairs from March 2019 show investor equity of only $ 900 million – where did the other $ 1.1 billion rise? The huge loss of investor capital has resulted in secondary market sources for non-traded REITs to list NorthStar Healthcare for $ 2.85 per share, indicating a massive loss to investors.
Haselkorn & Thibaut often deals with cases of direct participation products (DPPs), private placements, Non-traded REIT, and other alternative investments. These products are not always suitable for middle-class investors. Also, brokers who sell them are supplemented by an additional commission to supplement lower quality investments providing bias incentives for brokers to sell high-risk and low-value investments.
According to studies, historically there are non-traded REITs after even safe benchmarks are achieved, such as U. treasury bonds – which means that non-traded REIT provides paltry investment returns considering the risk an investor takes. Alternative investment products such as oil and gas partnerships, REITs and equipment leasing programs are only suitable for narrow-band investors under certain conditions due to high costs, liquidity, and major redemption charges for the products, if they can be redeemed at all. no.
However, because of the high-commission brokers, they earn on these products they sell them to investors who cannot profit from them. These products are so popular among brokers without investing for investors that many states now limit investors to invest more than 10% of their liquid assets in a Non-traded REIT. Many states impose these limitations because it realized that they provide virtually no benefit to investors to their risks.
Often investors do not understand that they have lost money many years after agreeing to the investment. In summary, for all their costs and risks, investors in these programs are not compensated in any way for loss of liquidity, risks, or costs. Investors can visit Haselkorn & Thibaut for a free consultation.
The US currency is strengthening today to the yen and the pound and has ambiguous dynamics with the euro.
The dollar is supported by the market expectation of a new round of US-Chinese trade negotiations, which should begin next week. Investor confidence in the possibility of detente between China and the United States is reinforced by the US administration’s statements. Treasury officials have denied rumors that the White House is considering banning Chinese companies from placing shares on US stock exchanges.
During the day, investors are waiting for the publication of the September US Manufacturing PMI data. The indicator can grow from 49.1 to 50.4 points and leave the stagnation zone. However, the forecasts may not be justified, since yesterday Chicago’s leading index of business activity seriously fell from 50.4 to 47.1 points.
Today, the euro is weakening to the yen and the pound and has ambiguous dynamics with the US dollar.
Investors are focused on the weak economic statistics of the Eurozone countries. The September Manufacturing PMI fell from 47.0 to 45.7 points, which is the lowest level since 2012. Germany suffered more than others, the indicator for it fell from 43.5 to 41.7 points. The September Eurozone CPI also disappointed investors, slowing down from 1.0% to 0.9%. Generally, the European economy continues to feel the negative effects of the US-PRC trade war, the decline in global demand, and uncertainty with Brexit.
Today, the pound generally weakens against the US dollar and the yen and is strengthening to the euro.
The British economy remains under pressure from uncertainty with Brexit, as evidenced by recent economic data. The September Manufacturing PMI grew from 47.4 to 48.3 points but did not leave the stagnation zone for the fifth month in a row. The price index for British real estate for September fell by 0.2%, which is also a consequence of the wait-and-see attitude of investors before Brexit.
According to BBC sources, the British government has prepared the text of an updated agreement, according to which customs checks of goods in Northern Ireland will be carried out but not at the border but the final destination of the goods. Today, the plan was criticized by the Irish government, which put additional pressure on the pound.
The Japanese yen is strengthening today against the pound and euro and weakens to the US dollar.
Investors are focused on the publication of data on Tankan business activity indices in various sectors of the Japanese economy. The sentiment index of the largest Japanese industrial producers fell from 7 to 5 points; the same indicator for non-manufacturing enterprises fell from 23 to 21 points. Most experts believe that the mood of large business continues to be negatively affected by the US-China trade conflict, which reduces global demand. An internal problem for the Japanese economy is the imminent increase in sales tax, which could seriously affect the service sector, as households will reduce their spending.
AUD is weakening today against its main competitors – GBP, USD, JPY, and EUR.
The pressure on the Australian dollar is exerted by the RBA decision to lower the interest rate a third time in five months, this time from 1.00% to 0.75%. In an accompanying statement, regulator’s head Philip Lowe noted that risks in the global economy continue to intensify, so the RBA is ready to further soften its monetary policy, and the period of low rates will be long. The main problem of the Australian economy, according to Lowe, remains low household spending.
Today, oil prices are making moderate growth attempts.
Quotes are supported by EIA data on a decrease in US production in July by 276K barrels to 11.806 million barrels per day. However, a significant increase in prices is hindered by a decrease in WTO forecasts of world trade growth. According to the organization, this year, the growth in trade in goods will be only 1.2% instead of the previously expected 2.6%. Next year, growth may reach 2.7% instead of 3.0%. In the evening, investors are waiting for the weekly API report on the US crude oil reserves. The last time they rose by 1.400 million barrels. The continuation of this trend may put pressure on prices.