Southern Star Storage III Carolina DST – Investment Loss Investigation

Securities Investigation: Southern Star Storage III Carolina DST – Help for Investors

Are you concerned about your investment in Southern Star Storage III Carolina DST? If so, the securities attorneys at The White Law Group may be able to help you recover your losses by filing a FINRA arbitration claim against the brokerage firm that recommended the investment to you.

What is Southern Star Storage III Carolina DST?

This DST is a Delaware Statutory Trust (DST) sponsored by Southern Star. It was reportedly formed to acquire and operate self-storage properties in the Southeastern U.S., and according to a 2022 SEC Form D filing, the sponsor sought to raise approximately $4.96 million from accredited investors.

DSTs are often marketed to investors seeking 1031 exchange replacement properties, with promises of passive income and tax deferral benefits. However, these investments can carry significant risks.

Distributions Suspended in 2024

According to recent updates, this DST suspended investor distributions in 2024. It is unclear whether distributions have resumed as of 2025. Suspended distributions may indicate underlying financial or operational challenges with the property or the trust itself.

This is a common risk with real estate-based private placements—especially those structured for 1031 exchanges—since tenant issues, market shifts, or property damage can all impact income flow.

Risks of Investing in 1031 DST Offerings

• Lack of Liquidity: There is no public secondary market for DST investments, making them highly illiquid.
• Distribution Risk: As seen with this offering, monthly distributions can be reduced or suspended entirely.
• High Fees and Commissions: Upfront fees and selling commissions may reduce potential returns and offset tax benefits.
• Real Estate Market Volatility: Property values may decline, particularly in uncertain economic environments.
• Tax Complications: Improperly structured exchanges or tax law changes may create unexpected tax liabilities.

Did Your Financial Advisor Misrepresent the Investment?

Despite these risks, many brokerage firms aggressively promote DST investments to retail investors—particularly retirees—due to the high sales commissions, often ranging from 6% to 10%. Unfortunately, some financial advisors fail to perform adequate due diligence or neglect to fully explain the illiquidity and potential downsides of the investment.

If a broker recommended Southern Star Storage III Carolina DST to you without properly disclosing these risks, or if the investment was unsuitable for your financial goals, you may have grounds for a FINRA arbitration claim.

Recovering Investment Losses through FINRA Arbitration

The Financial Industry Regulatory Authority (FINRA) provides an arbitration forum for investors to resolve disputes with brokers and financial advisors. If your advisor made an unsuitable recommendation, misrepresented the risks, or failed to conduct adequate due diligence on Southern Star Storage III Carolina DST, your brokerage firm could be held liable.

The White Law Group has represented hundreds of investors in FINRA arbitration claims involving high-risk alternative investments, including 1031 exchange DSTs, non-traded REITs, and private placement offerings.

Free Case Evaluation

If you are concerned about your investment please call The White Law Group at 888-637-5510 for a free consultation.

We are a national securities fraud and investor protection law firm with offices in Chicago, Illinois and Seattle, Washington.

Frequently Asked Questions (FAQs) : Southern Star Storage III Carolina

1. Is Southern Star Storage III Carolina DST still paying distributions?

Distributions for the DST were reportedly suspended in 2024. As of now, it is unclear whether distributions have resumed.

2. Can I sell my Southern Star DST investment?

DST investments are illiquid, and there is typically no secondary market. Investors are usually required to hold the investment until the sponsor decides to liquidate the trust, which may take several years.

3. How can I recover losses from Southern Star Storage III Carolina DST?

If your advisor made an unsuitable recommendation or failed to disclose the risks, you may be able to file a FINRA arbitration claim to recover your investment losses.