Benefit Street Partners Multifamily Trust: Securities Investigation

Investigating Potential Claims Involving Benefit Street Partners Multifamily Trust

The White Law Group is investigating potential securities fraud claims involving broker-dealers’ improper recommendation to purchase non-traded REIT, Benefit Street Partners Multifamily Trust.

Benefit Street Partners Multifamily Trust is a publicly registered non-traded REIT formerly known as Broadtree Residential.

BSP Multifamily Trust, Inc. (BSPMT) is an open-ended, continuously offered, multifamily REIT. BSPMT is designed to offer access to institutionally managed multifamily real estate and a durable stream of monthly income, according to its website. The non-traded REIT is currently invested in:

80% Allocation: Equity Investments in Multifamily
20% Allocation: Multifamily Alternative Investments

Risks of Non-Traded REITs

Non-traded REITs are complex and high risk investments that are really only suitable for sophisticated investors.

A real estate investment trust (REIT) is a company that owns, and in most cases, operates income-producing real estate. REITs own many types of commercial real estate, including office buildings, warehouses, hospitals, shopping centers, hotels and even timberlands. The REIT structure was designed to provide a real estate investment structure similar to the structure mutual funds provide for investment in stocks. Risks include:

Lack of liquidity: Non-traded REITs do not trade on public exchanges like stocks, meaning investors may have difficulty selling their shares if they need to access their investment quickly. Redemption options, if available, often come with significant restrictions and may be subject to delays.

Valuation uncertainty: Unlike publicly traded REITs, which have readily available market prices, the value of shares in non-traded REITs is typically determined by the REIT’s management or an independent third-party valuation firm. This lack of transparency can make it challenging for investors to accurately assess the current value of their investment.

Front-end fees and commissions: Non-traded REITs often come with substantial upfront fees and commissions, which can significantly reduce investors’ initial investment and erode potential returns. These fees typically include sales commissions, acquisition fees, and offering expenses, which are deducted from the investor’s capital before it is invested in real estate assets.

In addition to the risks involved with non-traded REITs, there are risks associated with investing in commercial real estate funds. Higher interest rates, rising property taxes and insurance and construction costs, along with a increase in new supply and more modest rent growth, are making it difficult for investors to see healthy returns.

Is this investment suitable for you?

Brokerage firms have a responsibility to perform due diligence on any investment. They must ensure that the investment is suitable for a particular investor in light of that investor’s age, investment objectives, income, net worth, and investment experience.  Such investments are likely only suitable for wealthy and/or sophisticated investors, due to the current risk of devaluation.

If you are concerned about investment losses in Benefit Street Partners Multifamily Trust and would like a free consultation with a securities attorney, please call The White Law Group at 888-637-5510.

The White Law Group is a national securities arbitration, securities fraud, and investor protection law firm with offices in Chicago, Illinois and Seattle, Washington.

For more information on the firm, visit https://whitesecuritieslaw.com.