Investigating Claims Involving CPA Collective Apartments DST
The White Law Group is investigating potential securities claims involving CPA Collective Apartments DST, a Delaware statutory trust formed in 2021. According to a Form D filed with the Securities and Exchange Commission (SEC), the issuer sought to raise $38.4 million in equity through a private placement offering.
The securities were offered under Rule 506(b) of Regulation D, which allows issuers to raise capital through exempt offerings that are not subject to the same registration requirements as publicly traded securities. These types of investments are typically sold through broker-dealers and financial advisors, often to retail investors seeking passive real estate income or tax benefits.
About CPA Collective Apartments DST
CPA Collective Apartments DST, located in Newport Beach, California, was formed as a statutory trust. The offering materials indicate a minimum investment of $25,000 and were marketed through various broker-dealers including Emerson Equity, LLC, Concorde Investment Services, Crescent Securities, FNEX Capital, WealthForge Securities, and others.
Sales commissions for the offering were estimated at $3.45 million, and more than $8.3 million of proceeds were designated for payments to related parties, according to the SEC filing.
Risks of DST Investments
Delaware Statutory Trusts (DSTs) are a popular vehicle for real estate investors, particularly those seeking to complete a 1031 exchange. While DSTs can provide potential tax deferral and income opportunities, they also carry significant risks, including:
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Illiquidity – DST investments are not traded on public exchanges, making them difficult to sell.
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High commissions and fees – which can erode overall returns.
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Concentration risk – investors’ funds are tied to a single property or limited portfolio.
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Potential loss of principal – if the underlying real estate underperforms.
Unfortunately, many investors are not fully aware of these risks before investing.
Potential Claims for Investors
Broker-dealers that recommend DSTs like CPA Collective Apartments DST are required to ensure that the investment is appropriate for the client’s financial situation, objectives, and risk tolerance. If your financial advisor misrepresented the risks, failed to conduct adequate due diligence, or recommended an unsuitable investment, you may have grounds to file a claim.
The White Law Group has handled a number of FINRA arbitration claims involving DST and other real estate-related securities. These cases often allege unsuitable investment recommendations, misrepresentation, and failure to supervise on the part of brokerage firms.
Free Consultation with Securities Attorneys
If you suffered losses investing in CPA Collective Apartments DST or another DST offering, you may be able to recover your losses through FINRA arbitration.
For a free consultation with a securities attorney, please call The White Law Group at 888-637-5510.
FAQs
What is CPA Collective Apartments DST?
It is a Delaware statutory trust formed in 2021 to raise funds through a private placement in real estate.
How much did the offering raise?
According to SEC filings, the issuer raised approximately $38.4 million.
What was the minimum investment?
The minimum investment was listed as $25,000.
What are the risks of investing in a DST?
Risks include illiquidity, high fees, lack of diversification, and potential loss of principal.
How can I recover my investment losses?
Investors may pursue recovery through FINRA arbitration if their broker-dealer improperly recommended the investment.
