ACA Illinois Tier 1 Student Housing DST: Investor Lawsuit Investigation
Investors in ACA Illinois Tier 1 Student Housing DST may be facing significant financial risks tied to illiquidity, lack of control, and potential declines in rental income. The White Law Group is investigating whether brokerage firms may have improperly recommended this high-risk private placement to clients without fully disclosing the risks. If you suffered losses, you may be able to recover damages through a FINRA arbitration claim.
About ACA Illinois Tier 1 Student Housing DST
Arrimus Capital, a private equity real estate sponsor, reportedly pursues value-add and opportunistic investments across the western U.S. and Texas. The firm targets multifamily, mixed-use, business, and healthcare properties to acquire, reposition, and develop.
According to SEC filings, Arrimus Capital filed a Form D in 2019 to raise capital for ACA Illinois Tier 1 Student Housing DST, a Delaware Statutory Trust (DST) offering structured as a Regulation D private placement.
Risks of Student Housing DST Investments
While DSTs are often marketed as passive income opportunities for 1031 exchange investors, they come with substantial risks:
- Capital Constraints: DSTs cannot raise additional funds after closing, leaving investors vulnerable if expensive repairs or upgrades are required.
- Occupancy Risks: Student housing investments are highly dependent on stable enrollment. A decline in student populations can negatively impact rental income and valuations.
- Lack of Control: Investors have no voting rights or management authority, making it impossible to influence operations or decisions.
- Illiquidity: Selling DST interests is difficult, often leaving investors locked in until the property is sold.
Brokerage Firm Liability
FINRA-registered broker-dealers have a duty to perform adequate due diligence and ensure that investment recommendations are suitable for each client’s objectives and risk tolerance. Unfortunately, many firms continue to push DSTs because of the high commissions associated with their sale. If your advisor failed to disclose the true risks, you may have grounds to pursue recovery.
Options for Recovery
Fortunately, FINRA provides an arbitration forum for investors seeking recovery of losses due to unsuitable investment recommendations or broker misconduct. Investors may be able to file individual FINRA arbitration claims against the brokerage firms that sold this DST.
Free Consultation with a Securities Attorney
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Seattle, Washington. If you are concerned about your investment, please call The White Law Group at 888-637-5510 for a free consultation.
FAQs about ACA Illinois Tier 1 Student Housing DST
What is the main risk of investing in a student housing DST?
Student housing investments depend heavily on consistent enrollment. Any decline in student populations or competition from new housing projects can lead to lower occupancy and reduced investor returns.
Can I sell my interest in this DST?
DST investments are highly illiquid. There is generally no secondary market, meaning investors are often locked in until the property is sold.
How can investors recover losses in this DST?
Investors may be able to pursue claims through FINRA arbitration against the brokerage firm that sold the investment if it was unsuitable or if risks were misrepresented.
