CX Retreat at the Park, DST: Securities Investigation

Investigating Claims: CX Retreat at the Park, DST

The White Law Group is investigating potential securities claims involving broker dealers who may have improperly recommended CX Retreat at the Park, DST to investors.

Delaware Statutory Trusts, or DSTs, are an alternative for 1031 exchange investors seeking replacement properties, allegedly offering the potential for monthly income and diversification without any on-going landlord duties.

According to SEC filings, CX Retreat at the park, based in Tampa, FL, filed a Form D to raise capital from investors. The total offering amount sold was purportedly $18,708,724, according to the Reg D Filing.

Complex Investment Products – CX Retreat at the Park

Investing in 1031 Delaware Statutory Trusts (DSTs) can be an alternative avenue for investors engaging in 1031 exchanges, offering potential monthly income and diversification without the burden of ongoing landlord responsibilities.

However, it’s essential for investors to exercise caution, as 1031 DSTs come with certain drawbacks. One significant limitation is that once the investment is made, DSTs cannot raise new capital, leaving investors vulnerable if unexpected expenses arise, such as costly repairs or declines in occupancy and rental income. Investors have minimal control over the property, with the sponsor retaining decision-making authority, despite potentially welcoming input from investors.

Further, 1031 DSTs are characterized by their illiquidity, meaning it can be challenging for investors to find a buyer if they wish to sell their interest before the property is ultimately sold. This lack of liquidity can limit investors’ flexibility and ability to exit their investment when desired.

Given the complex nature of these investment products, it’s important for investors to thoroughly evaluate whether 1031 DSTs align with their investment objectives, risk tolerance, and liquidity needs before committing capital to these products.

Is a DST Investment Suitable For You?

Your financial advisor should only recommend investments that are suitable for their clients. The financial advisor should conduct a suitability analysis for you, before recommending any investments. Liquidity needs, time horizon, risk tolerance, age, income, are just a few categories an advisor should take into account prior to recommending any investment. Once that is completed the brokerage firm must ensure that due diligence was completed at every level of each investment.

FINRA Claims to Recover Losses

The White Law Group is investigating the liability that FINRA registered brokerage firms may have for improperly recommending high-risk investments to investors.

Despite the risks of investing in DSTs, brokerage firms continue to push this type of investment because of the high commissions associated with their sale and creation.

Fortunately, FINRA does provide an arbitration forum for investors to resolve disputes if a broker or brokerage firm makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment. It is possible that they could be found liable for investment losses in a FINRA arbitration claim.  

Free Consultation

If you are concerned about your investment in CX Retreat at the Park, DST please contact the securities attorneys at The White Law Group at 888-637-5510 for a free consultation.

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Seattle, Washington.