Comrit Investments 1 LP, has made a tender offer to purchase up to 5 million shares of AR Global’s Healthcare Trust Inc., a non-traded real estate investment trust (REIT), for $8.61 per share. For AR Global REIT investors that purchased AR Global for $25 a share, this is a considerable loss.
AR Global Healthcare Trust REIT Offer
Comrit Investments 1 LP is a Tel Aviv-based securities and investment fund. Last April, the Healthcare Trust board approved the net asset value per share of $17.50. So the tender offer, which expires in April, offer nearly half the board’s value.
Comrit and its associates currently hold roughly 189k Healthcare Trust shares or approximately 0.2 percent of the outstanding. They will pay nearly $43.1 million if all shares in the current tender offer.
According to the last report, AR Healthcare Trust REIT invests in multi-tenant medical office buildings and has a portfolio of 193 properties. According to the SEC, the REIT’s primary offering was declared effective in February 2013 and closed in November 2014 after raising $2.2 billion in investor equity.
Non-Traded REITs Problems Similar to AR Global REIT
Unfortunately, many people that invested in non-traded real estate investment trusts (REIT) are experiencing major losses when they try to sell their investments. EIn addition, most investors are “caught off guard” by the losses until they sell. This is because non-traded REITs are not on the exchanges.
With non-traded REIT, the prices are not transparent and easily seen on exchanges such as the New York Stock Exchange or NASDAQ. Investors must rely on the sponsors to provide a net asset value.
However, the net asset value assigned by the non-traded REIT company is usually substantially less than what the investor can sell it for on a secondary market exchange.
In some cases, the value can be pennies on the dollar or not even a market for the investment anywhere.
These types of investments are only supposed to be sold to accredited investors. Unfortunately, thousands of retail investors have bought non-traded REITs and private placement that are unaware of the risks.
AR Global Lawsuits
This has led to an avalanche of lawsuits by investors against broker-dealers and investment firms to recover losses.
“We are getting many calls from non-traded REITs investors that are trying to recover their losses,’ says Jason Haselkorn, a national investment fraud lawyer.