Have You Suffered Losses Investing in Southern Star Storage Montrose II DST?
The White Law Group is investigating potential FINRA arbitration claims involving Southern Star Storage Montrose II DST, a Regulation D private placement. If your broker or financial advisor recommended this investment without adequate disclosure of the risks, you may be eligible to recover your losses.
Overview of the DST Investment
According to a Form D filed with the Securities and Exchange Commission (SEC), Southern Star Storage–Montrose II DST is a Delaware statutory trust formed in 2022. The company’s principal place of business is located in Houston, Texas.
The offering was structured as a beneficial interest in a DST (Delaware Statutory Trust), filed under Rule 506(b) of Regulation D. The total offering amount was reportedly $6,157,295, with a minimum investment of $100,000. As of the filing, no funds had been sold, and Emerson Equity LLC (CRD#: 130032) was listed as the selling broker-dealer for the offering.
The issuer estimated sales commissions of $554,156 to be paid in connection with the offering.
Distributions Suspended in 2024
According to recent updates, Southern Star DSTs 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.
Regulatory Risks of DST Investments
Regulation D offerings like Southern Star Storage–Montrose II DST are typically sold to accredited investors and are not subject to the same regulatory scrutiny as publicly traded securities. Because of their illiquid nature and complex structures, DSTs often carry significant risks, including:
- Limited or no secondary market
- Loss of principal
- High sales commissions and fees
- Conflicts of interest between sponsors and investors
- Market fluctuations affecting underlying real estate assets
In this case, the issuer also disclosed that approximately $157,009 in proceeds may be paid to company insiders, such as officers or promoters.
Did Your Broker Properly Disclose the Risks?
Brokerage firms have a duty to conduct thorough due diligence before recommending any investment and to ensure that each investment is suitable for the client’s investment objectives, financial profile, and risk tolerance. This includes providing full and fair disclosure of the risks involved with DST investments.
If a broker misrepresented the safety or income potential of Southern Star Storage–Montrose II DST or failed to perform adequate due diligence, the firm may be liable for your losses through a FINRA arbitration claim.
FINRA Arbitration vs. Class Action – What’s the Difference?
FINRA arbitration is a private dispute resolution process available to investors who have been wronged by their brokers or investment firms. It is typically faster and more cost-effective than a class action lawsuit. Most brokerage firm customer agreements require disputes to be resolved through binding arbitration under FINRA’s rules.
The White Law Group has successfully handled hundreds of FINRA arbitration cases across the country involving real estate and DST investments.
Free Consultation with a Securities Fraud Attorney
If you invested in Southern Star Storage–Montrose II DST and are concerned about your investment, please call The White Law Group at 888-637-5510 for a free consultation. We are a national securities arbitration law firm with offices in Seattle, Washington, and Chicago, Illinois, and we represent investors throughout the country in claims against their brokerage firms.
To learn more, visit www.whitesecuritieslaw.com.
Frequently Asked Questions: Southern Star Storage Montrose II DST
What is Southern Star Storage–Montrose II DST?
It is a Delaware statutory trust formed in 2022 to raise capital for commercial real estate investment through a Reg D offering.
How much did the offering raise?
The issuer sought to raise approximately $6.15 million, with a $100,000 minimum investment, but had not reported any sales as of the filing.
Can I recover losses if I invested in this DST?
If your broker misrepresented the investment or failed to perform adequate due diligence, you may be able to recover losses through FINRA arbitration.
Last modified: August 7, 2025
