Sonny Goldreich, in a recent article for the Maryland publication the Gazette.net, wrote an article about the struggles of investments in DC area REITs in the current economic climate. Goldreich notes that “panic selling has hurt stock prices…but some were in a tailspin even before the wild swings in financial markets began Aug. 4.”
Goldreich indicates that the difficult time these investments have had in recent months and over the past year is, at least in part, the result of a “drop in federal job growth [that] curbs demand [for new properties]. He cited the report of the Virginia real estate research firm Delta Associates which stated that “Developers that grew spoiled on record federal hiring in recent years will have to adjust to [the] steep drop in agency growth implicit in the debt ceiling deal.” While the report goes on to say that other sectors may be areas of growth for local real estate markets and could take up the slack for federal cuts, it will be important for investors to monitor how the REITs respond to this period of flux in the DC real estate market.
The article further notes that Corporate Office Properties Trust (COPT), First Potomac Realty Trust, and Washington Real Estate Investment Trust have all been down at least 25% at some point over the last year. It also mentions that Federal Realty Investment Trust is only down 5.5% since a July high, but says that is “only because it spent the year recovering from a 12-month low set on Dec. 16.”
The White Law Group will continue to carefully monitor this situation and how it affects investors.
The White Law Group is currently representing many investors who own high-risk REITs in claims against the brokerage firm that recommended the investment. While REIT investments provide a legitimate way for smaller investors to be able invest in commercial real estate, REIT investments are not suitable for all investors. REITs often pay a higher commission to the brokers than traditional investments, which may, in some cases, explain the motivation for financial professionals in encouraging clients to invest in REITs.
Also, brokerage firms have a fiduciary duty to recommend only those investments that are appropriate for the investor in light of the investor’s age, net worth, investment experience, and investment objectives.
If you have questions about your investment in the Corporate Office Properties Trust, First Potomac Realty Trust, Washington Real Estate Investment Trust, or Federal Realty Investment Trust REITs call our Chicago office at 312/238-9650 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 and Boca Raton, Florida.
For more information on The White Law Group, please visit our website at www.whitesecuritieslaw.com.
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