Written by The White Law Group• November 23, 2020• 4:07 pm• Blog, Investment Loss Recovery

CIM Income NAV: Decreases NAV, Limits Redemptions

CIM Income NAV Inc. Limiting Share Redemptions, featured by top securities fraud attorneys, The White Law Group

Concerned about your investment in CIM Income NAV Inc.?

Are you concerned about your investment in CIM Income NAV Inc. (Cole Real Estate Income Strategy Inc.)? If so, the securities attorneys at The White Law Group may be able to help you by filing a FINRA Dispute Resolution claim against the brokerage firm that recommended the investment.

Table of Contents

CIM Income NAV Inc., formerly known as Cole Real Estate Income Strategy Inc., is a publicly registered non-traded REIT focused on shopping centers, retail, industrial and distribution, and office properties, according to its website.

The REIT is structured as a perpetual-life, non-exchange traded REIT. This means that, subject to ongoing regulatory approval of filing for additional offerings, the company will be selling shares of our common stock on a continuous basis and for an indefinite period of time.

Net Asset Values

According to filings this week, the company has declared a net asset value (NAV) per share for each of its four classes of common stock, as of October 31, 2020.

The NAV per share is based on the estimated value of the company’s assets, less the estimated value of its liabilities divided by the number of outstanding shares. Shares were originally offered at $15.00 per share.

Class D shares had a net asset value per share of approximately $16.83 each, as of October 31, 2020. The previous month, Class D shares were valued at approximately $16.86. Class T shares had an NAV per share of approximately $16.40, and the previous month, the shares were valued at $16.44 each. Class S shares had an NAV per share of approximately $16.38. The previous month, Class S shares were valued at $16.42 each. Class I shares had an NAV per share of approximately $17.11, and the previous month, were valued at $17.13 each.

In July the company reported in filings with the SEC it would temporarily limit the number of shares that can be redeemed through its share redemption plan (SRP) in order to maintain a reasonable level of liquidity, and planned to return to its previous limits in the fourth quarter of 2020.

The company further notes that “the impact of the COVID-19 outbreak on the value of our assets may be significant and will largely depend on future developments, which are highly uncertain and cannot be predicted.”

Is a Non-traded REIT suitable for you?

The White Law Group is investigating potential securities claims involving broker-dealers’ improper recommendation that investors purchase high-risk non-traded REIT investments, like CIM Income NAV Inc.. Many investors are not fully aware of the problems and risks associated with these investments before purchasing them.

Real estate investment trusts (REITs) are complex and inherently risky products. Compared to traditional investments, such as stocks, bonds and mutual funds, REITs are significantly more complex and often better suited for sophisticated and institutional investors.

Brokers have an obligation to make investment recommendations that are consistent with their clients risk tolerance, net worth, investment objectives and experience in the market. Brokers have an opportunity to earn high commissions—sometimes as high as 15% — on non-traded REITs. This may provide some brokers with enough incentive to make unsuitable investment recommendations.

Further, non-traded REITs generally lack liquidity. Investors looking to sell these investments often have difficulty finding a buyer, and if they are able to find one can suffer significant losses on the sale.

Broker dealers are required to perform adequate due diligence on any investment they recommend and to ensure that all recommendations are suitable for the investor. Firms that fail to do so, may be held responsible for any losses in a FINRA arbitration claim.