Recently investors who purchased NorthStar Healthcare Income Inc REIT are receiving tender notices from Comrit and now discovering that they have suffered massive losses because their shares are worth only a fraction of a purchased dollar on the secondary market.
This past week Northstar’s Chairman, Justin Chang, abruptly resigned. Richard Welch is filling his position. NorthStar REIT’s investment object is focused on the needs-based senior housing sector, including independent living facilities, assisted living, memory care, and skilled nursing facilities.
For investors, the latest estimated valuation not only reflects a decrease in the estimated net asset value (NAV) price (as of June 30, 2019), it also appears to be based on calculations that used third-party appraisals for at least 15 of the properties owned by Northstar. This is, of course, following on the heels of the February 2019 decision by Northstar to suspend distributions to investors (after previously cutting the distribution rate by more than 50%).
Attorneys at Haselkorn & Thibaut are investigating financial advisors that had clients invest in Northstar Healthcare Income Inc, a non-traded real estate investment trust (REIT). They have set up a toll-free number for investors to call to review their cases at Haselkorn & Thibaut, P.A. at 1-800-856-3352.
The timeline here for investors includes a significantly reduced distribution rate followed more recently (earlier this year) by a suspended distribution and, now, a reduction in the estimated NAV prices. According to Palm Beach, Florida investment fraud lawyer Matthew Thibaut (InvestmentFraudLawyers.com), Esq. “this recent drop in estimated NAV value looks like more bad news for investors in Northstar Healthcare.”
Northstar Healthcare Income Inc Investigation – 2020 Northstar Healthcare Income Update
The securities fraud lawyers at Haselkorn & Thibaut are investigating the sales practices of financial advisors that had their clients invest in NorthStar Healthcare Income Inc. NHHS – a non-traded real estate investment trust (Non-traded REIT) based in New York, NY. The REIT has investments in healthcare real estate.
According to multiple news sources, NorthStar Healthcare Income has enormous losses and may not be worth less than 20 cents per dollar purchased. Besides, the REIT no longer distributes a dividend – and there was only a return on the principal of investors and not funds left from any business operations.
Many financial advisors do not understand the problems of non-traded REIT models and only recommend these products to their 7% commission.
In December of 2017, the REIT reduced its distribution rate from 6.67% to 3.31%. A year later, NorthStar reduced its joint-stock value from $8.50 per share to $7.10 per share. To make matters worse, NorthStar then told shareholders that it was suspending its repurchase program – if the shareholder had a qualified disability or was not dead.
However, these valuation metrics by the company are in serious doubt. Firstly, by NorthStar Healthcare Income Inc disclosures, the company did not pay any return on investment in three years and instead only took the investor’s original investment capital with considerable loans to return these funds. Accordingly, NorthStar’s financial affairs from March 2019 show investor equity of only $900 million – where the billion dollars go?
This results in a considerable loss for investors and is even worse if sold secondary market. Current market values show the value for it as $2.85 per share or net asset value, indicating a massive loss to investors.
What is Northstar Healthcare REIT?
Northstar Healthcare Income Inc is a public and untraded REIT that was created “to create, acquire and own healthcare assets in the United States and Canada,” according to the company’s website. The investment was initiated to initiate, acquire, and manage a portfolio of healthcare assets in the United States and Canada, focusing on retirement housing. NorthStar Healthcare needs at least $1.5 billion in annual revenue and a net income of at least $100 million per year, focusing on investment in needs-oriented senior housing sectors, including nursing homes, assisted living, nursing homes, and community health centers.
Launched in February 2013, NorthStar Healthcare REIT has generated gross proceeds totaling $2 billion through asset sales in the United States, Canada, and Australia, including $225.3 million as of June 30, 2015. Griffin American Healthcare (“REIT III”), which focuses primarily on healthcare facilities, acquired a portfolio of healthcare facilities totaling 67 buildings in North America and Canada on August 14, 2015, with a focus on retirement homes.
The REIT is co-financed by Griffin American Healthcare, Griffin Medical Group, Inc., and Griffin Health Systems.
NorthStar has named Richard Welch as its new chairman effective immediately.
NorthStar Healthcare Income Inc is a publicly registered non-traded Real Estate Investment Trust (“REIT”) with revenues of about $2 billion. NorthStar is a publicly traded REIT. It. From December 6.7 to 3.31% NorthStar reduced its distribution rate. NorthStar REIT is a high volatility-prone investment that isn’t suitable for every investor.
Because of these high commissions, brokers sell them to shareholders who cannot profit from them based on these products. These products have become so popular among brokers a number of states currently prohibit investors from investing at least 10% of their capital.
How Can Northstar REIT Investors Recover Losses
Haselkorn & Thibaut, a national investment fraud law firm, represents Northstar REIT investors and 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.
According to studies, historically, non-traded REITs are not safe investments even if safe benchmarks are achieved. This 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 a small group of investors under certain conditions due to high costs, liquidity, and significant redemption charges for the products, if they can be redeemed at all. no.
Financial advisors and brokers are often motivated because of their commission on these products they sell to investors. These products are so popular among brokers that many states now limit investors to invest more than 10% of their liquid assets in a non-traded REIT. States impose these limitations because they realized that they provide virtually no benefit to investors on their risks.
Investors can call 888-628-5590 or visit Haselkorn & Thibaut for a free consultation on recovering Northstar Healthcare losses.