Declining NAV: Strategic Student and Senior Housing Trust

The White Law Group continues to investigate potential securities claims involving broker dealers who may have improperly recommended Strategic Student and Senior Housing Trust, Inc., to investors.    

Strategic Student & Senior Housing Trust Inc. reportedly sold its final student housing property, The District, located near the University of Arkansas in Fayetteville, for $63 million in January.  The property was acquired by a joint venture between Walton Street Capital LLC and Strategic Asset Management I LLC.

The proceeds will primarily be used to repay two loans totaling approximately $55.3 million, with the remaining funds allocated for “other corporate purposes,” according to company filing. Strategic Asset Management will continue to manage the property on behalf of the joint venture. As of September 30, 2022, the trust owned one student housing property and four senior housing properties, with an estimated net asset value per share of $6.08 as of December 31, 2022.

Strategic Student & Senior Housing Trust, Inc. – Secondary Sale Price may indicate losses for investors 

According to Central Trade & Transfer, a secondary market for alternative investments, shares of the REIT were sold for $3.81 per share, which may indicate losses for investors.  Shares of Strategic Student and Senior Housing Trust were originally offered for $10.00 per share.  

The company raised capital through a private offering in 2017, and its stock became effective in 2018, but ceased offering shares in March 2020, due to the COVID-19 pandemic.      

As we previously reported, the company suspended its share redemption program and distributions to investors following the onset of the COVID-19 pandemic.    

The Risks of Non-Traded REITs

Non-traded REITs such as Strategic Student & Senior Housing Trust do not trade on a national securities exchange and are therefore illiquid products that can be difficult to sell. Investors can typically only sell their shares through redemption with the issuer, or through a fragmented and illiquid secondary market.            

Usually, investments such as this one has a high up-front commissions and fees –sometimes as high as 10% — which goes to the broker, the broker-dealer, and the wholesale broker or manager. This may offer an incentive for brokers to sell this type of investment, despite the risks to their clients.    

Broker Due Diligence and Regulation Best Interest 

The SEC’s Regulation Best Interest (Reg BI) is a rule under the Securities Exchange Act of 1934. It sets a higher standard of conduct called the “best interest” standard for broker-dealers and their representatives. This standard applies when they suggest any securities transaction or investment strategy involving securities, including recommending different types of accounts to retail customers. Essentially, it requires these professionals to prioritize the customer’s best interests when making such recommendations.  

Under the “best interest” standard, broker-dealers are obligated to perform comprehensive due diligence when evaluating any investment.  This comprehensive evaluation aims to empower investors to make well-informed decisions aligned with their best interests. 

If your financial advisor fails to perform due diligence on an investment before recommending it to you, they could be held liable for investment losses. If your advisor unsuitably recommended a non-traded REIT and you lost money, the securities attorneys at The White Law Group may be able to help you. You may be able to recover losses by filing a FINRA Arbitration claim against the brokerage firm that sold you the investment. 

 Free Consultation with a Securities Attorney   

If you have suffered losses in Strategic Student & Senior Housing Trust, Inc. and would like to speak to a securities attorney about the potential to recover your investment losses, please call The White Law Group at 1-888-637-5510 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.