Written by The White Law Group• February 16, 2024• 2:46 pm• Blog, Investment Loss Recovery

Concerned about your investment in CF Livonia DST?

CF Livonia DST, Securities Investigation

Are you concerned about your investment in CF Livonia DST? If so, the securities attorneys at The White Law Group may be able to help you by filing a FINRA Arbitration claim against the brokerage firm that sold you the investment.

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Cantor Fitzgerald is a sponsor of non-traded NAV REITs, Delaware Statutory Trusts (DSTs) to complete 1031 tax-deferred exchanges, Qualified Opportunity Zone Programs and other private placements. The company reportedly filed a Form D to raise capital from investors for the offering CF Livonia DST, according to SEC filings. The total offering amount was purportedly $61,900,000.

Delaware Statutory Trusts, or DSTs, are an alternative for 1031 exchange investors seeking replacement properties, allegedly offering the potential for monthly income and diversification without any on-going landlord duties.

Risk Factors related to a 1031 Exchange

Property Value Loss – All real estate investments have the potential to lose value over time.

Tax Status Changes – The income stream and depreciation schedule for any investment property may affect the property owner’s income bracket and/or tax status. An unfavorable tax ruling may cancel deferral of capital gains and result in immediate tax liabilities.

Possibility of Foreclosure – All financed real estate investments have potential for foreclosure.

Illiquid Investments – 1031 exchanges are commonly offered through private placement offerings and are illiquid securities. There is no secondary market for these investments.

Reduction or Elimination of Monthly Cash Flow Distributions – Like any investment in real estate, if a property unexpectedly loses tenants or sustains substantial damage, there is potential for suspension of cash flow distributions.

Fees/Expenses – Investors’ returns may be affected by the costs associated with the transaction. and may outweigh the tax benefits.

Investigating Potential Lawsuits

The White Law Group is investigating the liability that FINRA registered brokerage firms may have for improperly recommending high-risk investments to investors.

Despite the risks of investing in DSTs, brokerage firms continue to push this type of investment because of the high commissions associated with their sale and creation.

Fortunately, FINRA does provide for an arbitration forum for investors to resolve disputes if a broker or brokerage firm makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment. It is possible that they could be found liable for investment losses in a FINRA arbitration claim.