CNL Healthcare Properties Inc. – Tender offer price suggests losses for investors, NAV continues to Decline

The White Law Group continues to investigate securities claims involving broker dealers who may have unsuitably recommended CNL Healthcare Properties to investors. 

CNL Healthcare Properties is a non-traded real estate investment trust (REIT) that invests in the seniors housing and healthcare markets sponsored by CNL. 

According to letter to shareholders on February 10, a Tel Aviv-based investment fund, Comrit Investments 1 LP has launched an unsolicited tender offer to purchase up to 8.8 million shares of CNL Healthcare Properties Inc. for $3.66 per share. The original offering price was $10 per share.

The company’s current Net Asset Value has continued to decrease since December 31, 2017 when it was valued at $10.32 per share. It apparently decreased to $10.01 as of December 31, 2018 and then to $7.81 per share as of Dec. 31, 2019. The company plans to declare a new NAV on March 11, 2021, according to the DI Wire.

New Net Asset Value, March 12, 2021

The board of CNL Healthcare Properties Inc. has just declared a new net asset value per share of $7.38 for the company’s common stock as of December 31, 2020. There was a 4.7 percent decline in the appraised value of the company’s 71 assets when compared to the appraised values for the prior year’s NAV, according to filings with the SEC.

In May 2020 we reported that the company had seven coronavirus related resident fatalities across its 71 senior housing community properties, according to Fact Right, an alternative investment due diligence firm.  

CNL Healthcare reportedly noted at the time that there were 34 confirmed cases among residents and staff members in 11 different properties located in 9 different states.  CNL Healthcare has approximately 7,000 residents and 5,000 community-level staff. The company also advised that the current market conditions would likely delay the timeline of its ability to execute on any transactions to provide liquidity to shareholders.

Filing a Complaint against your Brokerage Firm

The White Law Group continues to investigate the liability that brokerage firms may have for unsuitably recommending high risk investments like CNL Healthcare Properties Inc. to investors.

The trouble with non-traded REITs, like CNL Healthcare Properties, is that they involve a high degree of risk. They are also typically sold as unregistered securities which lack the same regulatory oversight as more traditional investment products like stocks or bonds.

Non-traded REITs are also known for high sales commissions and due diligence fees. Brokers have an enormous incentive to push these products to unsuspecting investors who do not fully understand the risks. Sometimes brokers misrepresent the basic features of the products – usually focusing on the income potential and tax benefits while downplaying the risks.

If a broker or brokerage firm makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment they may be found liable for investment losses in a FINRA arbitration claim.

If you are concerned about your investment in CNL Healthcare Properties or another CNL investment, please contact The White Law Group at 1-888-637-5510 for a free consultation.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois. The firm represents investors throughout the country in claims against their brokerage firm.

For more information on the firm and its representation of investors, visit www.WhiteSecuritiesLaw.com.