InPoint Commercial Real Estate Income – Recovery Options for Investors

InPoint Commercial Real Estate Income: Investor Lawsuits & Recovery Options

InPoint Commercial Real Estate Income Inc. investors may be facing significant losses, and many are now evaluating potential legal options. The White Law Group continues to investigate securities fraud lawsuits on behalf of investors who were sold InPoint by brokerage firms that allegedly failed to fully disclose the risks of investing in a high-risk, illiquid non-traded REIT. With suspended redemptions, declining secondary market values, and discounted tender offers, investors may have grounds to pursue FINRA arbitration claims to recover investment losses.

Secondary Market Pricing Suggests Significant InPoint Investor Losses

Although InPoint Commercial Real Estate Income Inc. currently reports an estimated net asset value (NAV) of $15.15 per share, investors attempting to sell on secondary markets may be facing steep discounts.

Recent trading activity on the secondary market platform LODAS Markets reportedly reflects pricing around $10.50 per share, indicating that some investors may be realizing substantial losses compared to both the most recent NAV and the original $25 per share offering price. This pricing disparity may reflect market concerns about liquidity, valuation stability, and ongoing uncertainty in the commercial real estate sector.

Are Non-Traded REIT Values Inflated?

Industry analysts continue to warn that non-traded REITs — particularly those tied to commercial real estate — may be overvalued. With rising interest rates and persistent remote-work trends impacting office markets, commercial real estate values have faced downward pressure. CoStar recently reported record-high office vacancy rates, exceeding levels seen during the 2008 financial crisis, compounding concerns for investors.

For many non-traded REIT investors, liquidity challenges magnify losses since redemption programs are limited and secondary market sales are typically heavily discounted.

InPoint Suspends Share Redemptions

According to an 8-K filing with the SEC, InPoint suspended its continuous public offering and share repurchase plan as of February 10, 2023 due to redemption requests exceeding capital inflows. The suspension also included its distribution reinvestment plan. The company has stated it intends to evaluate strategic options going forward.

This was not the first suspension. InPoint also halted distributions and redemptions during the COVID-19 pandemic. The REIT joins other large non-traded REITs, including Starwood REIT and Blackstone REIT, that have imposed redemption limits in recent years.

Risks of Non-Traded REIT Investments

Non-traded REITs are complex, high-risk, and illiquid investments. Investors often do not fully understand that:

• Shares are difficult to sell

• Redemption programs can be halted

• Secondary market values are typically deeply discounted

• Performance depends heavily on sector conditions

• Fees and commissions are typically much higher than traditional investments

For many retirees and conservative investors, these characteristics may make non-traded REITs unsuitable.

Recovery of Investment Losses – InPoint Commercial REIT

The White Law Group is investigating FINRA arbitration claims against broker-dealers who recommended InPoint and similar mortgage REITs to investors. Brokerage firms are legally obligated to ensure investments are suitable based on the investor’s age, goals, experience, net worth, and risk tolerance. Failure to do so may constitute securities fraud or negligence.

Class Action vs. Individual FINRA Arbitration

Many investors wonder whether joining a class action is better than filing an individual arbitration claim. Typically, investors with losses over $100,000 may benefit more from filing an individual FINRA arbitration claim, while class actions are generally better suited for large groups with smaller, similar losses.

Free Consultation

If you invested in InPoint Commercial Real Estate Income Inc. and are concerned about losses, call The White Law Group at (888) 637-5510 for a free, no-obligation consultation.

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

FAQs – InPoint Commercial Real Estate Income Lawsuits

1. Can I recover losses from my InPoint Commercial Real Estate Income investment?
Possibly. Investors may be able to recover losses through a FINRA arbitration claim against the brokerage firm that recommended the investment if the firm failed to conduct proper due diligence or recommended the REIT despite it being unsuitable.

2. Is InPoint still paying distributions?
Distributions are not guaranteed and have previously been suspended. The company has also suspended offerings and redemptions, raising additional concerns for investors. Investors should review current filings and consult an attorney to discuss options.

3. Do I need to wait for a class action lawsuit?
No. Most claims involving non-traded REIT losses are handled through individual FINRA arbitration, which is often faster and may provide better recovery outcomes than class actions.