RREEF Property Trust (RPT) Securities Investigation

Concerned about your investment in RREEF Property Trust? 

The White Law Group continues to investigate potential securities claims involving broker dealers who may have unsuitably recommended RREEF Property Trust to Investors.

RREEF Property Trust, Inc. is a publicly registered, daily NAV REIT1 advised by DWS Group. 

According to its prospectus, “RREEF Property Trust is a speculative security and, as such, involves a high degree of risk. There is no guarantee that any real estate strategy, including ours, will be successful. There is no public market for our shares of common stock. Our shares should be considered as having only limited liquidity and at times may be illiquid.” 

RREEF Property Trust Redemption Requests Exceed Limit

According to the DI Wire on November 12th, RREEF Property Trust Inc. received redemption requests exceeding its 2% monthly limit in October 2024. Redemption requests were reportedly honored on a pro rata basis, with each shareholder receiving about 37.6% of their request—a rise from 24.3% in September.

For October, the REIT declared distributions of approximately $0.07 per share, payable on November 4. RREEF primarily invests in income-generating commercial real estate in the U.S., including office, industrial, retail, and residential properties. Since its first public offering in 2013, it has raised $397.8 million and, as of June 2024, held $495 million in real estate investments. Its current $2 billion public offering began in August 2023.

Decline in NAV

Additionally, RREEF Property Trust reported updated daily net asset values (NAV) for its shares as of October 31, 2024. The REIT also reported a slight decrease in net asset value (NAV) across all share classes from September to October, with changes ranging from 0.29% to 0.37%.

Daily NAV REIT- RREEF Property Trust 

A daily NAV (Net Asset Value) REIT (Real Estate Investment Trust) refers to a type of REIT where the Net Asset Value is calculated daily. 

A REIT is a company that owns, operates, or finances income-generating real estate across a range of property sectors. They allow individuals to invest in real estate without having to buy or manage properties directly. 

Net Asset Value (NAV) is the value of a fund’s assets minus its liabilities. For a REIT, this typically includes the value of the properties it owns, minus any debts or other obligations. By calculating the NAV daily, investors may get a more frequent and accurate picture of the underlying value of the REIT’s assets. 

While investing in a daily NAV REIT may provide investors with more transparency, they may also have higher administrative costs due to the more frequent valuation process. 

Risks of Investing in Non-Traded REITs 

Investing in non-traded REITs carries several risks, with liquidity being one of the most prominent. Unlike publicly traded REITs, non-traded REITs are not listed on major exchanges, meaning investors cannot easily sell their shares. It can take years before the REIT lists publicly or liquidates, potentially locking up investors’ funds for an extended period. This lack of liquidity can be particularly concerning during market downturns when investors might want to exit or reallocate their portfolios.

Another significant risk is the uncertainty in valuation and transparency. Non-traded REITs often lack regular, market-driven pricing, making it difficult for investors to assess the true value of their investment. This opacity can lead to higher fees, as non-traded REITs typically charge substantial upfront costs, including sales commissions and management fees, which erode returns. Additionally, distribution rates are not guaranteed and may be paid from borrowed funds or capital rather than from operating income, creating the illusion of profitability while risking long-term sustainability.

Broker Due Diligence 

The White Law Group is currently investigating potential claims against brokerage firms who may have unsuitably recommended non-traded REITs to investors. 

These claims result when broker-dealers fail to perform adequate due diligence on the investments before offering them for sale to their clients. Also, the brokerage firms often fail to determine if the investments were appropriate given their clients’ age, investment, experience, net worth, and risk tolerance. 

Despite the risks of investing in alternative investments, brokerage firms continue to push this type of investment because of the high commissions associated with their sale and creation. Brokers are required to perform due diligence on each investment before recommending it to investors.

If a brokerage firm makes unsuitable investment recommendations or fails to adequately disclose the risks associated with an investment, they may be liable for investment losses through FINRA arbitration. 

Free Consultation with a Securities Attorney 

If you are concerned about your investment losses in RREEF Property Trust, please call the securities attorneys of The White Law Group at (888) 637-5510 for a free consultation. 

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