The White Law Group Investigates Complaints Involving Inland’s Self-Storage Portfolio DST Series
The White Law Group is investigating potential securities claims on behalf of investors in Inland Private Capital Corporation’s numbered Self-Storage Portfolio DST offerings. If you invested in any Self-Storage Portfolio DST and have concerns about your investment, contact our FINRA arbitration attorneys today for a free consultation.
Since the early 2010s, Inland Private Capital Corporation (IPC), a subsidiary of The Inland Real Estate Group of Companies headquartered in Oak Brook, Illinois, has sponsored a series of numbered Self-Storage Portfolio Delaware Statutory Trusts (DSTs) as replacement properties for investors completing 1031 exchanges. The White Law Group is currently reviewing potential claims involving the following offerings in the series:
- Self-Storage Portfolio III DST
- Self-Storage Portfolio XI DST
- Self-Storage Portfolio XII DST
- Self-Storage Portfolio XIII DST
- Self-Storage Portfolio XIV DST
- Self-Storage Portfolio XVI DST
- Self-Storage Portfolio XVII DST
- Self-Storage Portfolio XVIII DST
- Self-Storage Portfolio XIX DST
- Self-Storage Portfolio XX DST
- Self-Storage Portfolio XI DST
- Self-Storage Portfolio XV DST
If you invested in one of these offerings, or in a related IPC self-storage DST, contact The White Law Group to discuss your options.
What Is the Self-Storage Portfolio DST Series?
Each Self-Storage Portfolio DST is a separate Delaware statutory trust formed by Inland Private Capital Corporation to hold one or more self-storage properties, structured as a private placement under Regulation D. Investors, often completing a 1031 exchange to defer capital gains taxes, purchase fractional beneficial interests in the trust rather than the real estate directly.
According to SEC filings, Self-Storage Portfolio XI DST holds two self-storage properties in Grand Rapids, Michigan operated under the Devon Self-Storage brand, totaling roughly 392,000 rentable square feet across 781 units. Self-Storage Portfolio XV DST, a related offering in the same numbered series, raised approximately $120 million from 261 investors beginning in January 2022, with a $250,000 minimum investment, under Rule 506(b) of Regulation D.
Risks of Investing in Self-Storage Portfolio DSTs
Like other Regulation D private placements, offerings in the Self-Storage Portfolio series carry risks that are not always clearly disclosed by the brokers who sell them:
- Illiquidity. DST interests cannot be freely bought or sold, and investors have no guaranteed exit.
- No guaranteed return. Distributions depend on the performance of the underlying storage properties and can be reduced or suspended.
- Lack of control. DST investors have no voting rights over management or sale decisions.
- Leverage risk. Self-storage DSTs commonly carry mortgage debt, and a default on loan covenants can put investor principal at risk.
- Market concentration. Self-storage performance depends heavily on local occupancy rates and new supply in the submarket.
- High commissions. In Self-Storage Portfolio XV DST, sales commissions alone totaled an estimated $6 million, with related-party fees adding roughly $8.85 million on top, according to SEC filings.
Broker-Dealers Involved in Sales
This is a list of broker-dealers who have purportedly sold Inland Self-Storage Portfolio DST offerings:
- Inland Securities Corporation (CRD# 15807)
- Stifel, Nicolaus & Company, Incorporated (CRD# 793)
- Cetera Advisor Networks, LLC (CRD# 13572)
- McDermott Investment Services, LLC (CRD# 154926)
- WealthForge Securities, LLC (CRD# 152550)
- RCX Capital Group, LLC (CRD# 114290)
- Concorde Investment Services, LLC (CRD# 151604)
- JRL Capital Corporation (CRD# 10225)
- Cambridge Investment Research, Inc. (CRD# 39543)
- Arkadios Capital (CRD# 282710)
- WestPark Capital, Inc. (CRD# 39914)
- Avantax Investment Services, Inc. (CRD# 13686)
- American Portfolios Financial Services, Inc. (CRD# 18487)
- Colorado Financial Service Corp. (CRD# 104343)
- Independent Financial Group, LLC (CRD# 7717)
- Triad Advisors, Inc. (CRD# 25803)
- DFPG Investments, Inc. (CRD# 155576)
- Securities America, Inc. (CRD# 10205)
- SagePoint Financial, Inc. (CRD# 133763)
- Ausdal Financial Partners, Inc. (CRD# 7995)
- Royal Alliance Associates, Inc. (CRD# 23131)
- DAI Securities, LLC (CRD# 36673)
If your account was held at any of these firms and you were sold a Self-Storage Portfolio DST, the firm may be liable for failing to supervise the recommendation.
Broker Due Diligence and Supervisory Obligations
Brokerage firms that recommend a private placement like a Self-Storage Portfolio DST are required to perform reasonable due diligence on the offering and to ensure the recommendation is suitable for each investor’s financial situation, objectives, and risk tolerance. A firm that fails to do so, or fails to adequately supervise the brokers who sold the offering, may be held liable for resulting losses through FINRA arbitration.
Recovering Investment Losses
If you were sold an interest in a Self-Storage Portfolio DST and believe the investment was misrepresented or unsuitable for your financial situation, you may have legal recourse through FINRA arbitration. Common grounds for a claim involving DST investments include failure to disclose risk, illiquidity, or fees, unsuitable recommendations, overconcentration in illiquid private placements, and failure to supervise. Learn more at our FINRA arbitration attorney page.
Contact The White Law Group
The White Law Group is a national securities fraud and investment loss recovery law firm with offices in Chicago and Seattle. Since 2010, our firm has handled over 800 FINRA arbitration cases involving investment fraud, unsuitable recommendations, and negligence.
If you suffered losses in any Self-Storage Portfolio DST or another Inland Private Capital offering, call us today at (888) 637-5510 for a free consultation, or contact us online.
Frequently Asked Questions
1. How do I file a claim to recover money invested in a Self-Storage Portfolio DST?
Most brokerage account agreements typically contain a pre-dispute arbitration clause, so claims like this are generally filed and resolved through FINRA arbitration rather than in court. Arbitration can still result in a monetary recovery, and an experienced securities attorney can review your account records to evaluate a potential claim.
2. What makes a DST recommendation unsuitable?
A recommendation may be unsuitable if the investment represented a disproportionate share of your assets, you were not told about the illiquidity or fee structure, or the DST did not match your stated risk tolerance and objectives. If any of these apply to your investment, it may be worth having your account reviewed.
3. Can the brokerage firm be held responsible even if it did not approve of how the investment turned out?
Yes, in many cases. Firms have a supervisory duty to review private placement recommendations before they reach investors, and a firm that failed to catch an unsuitable or poorly disclosed offering can be held liable for the resulting losses through FINRA arbitration.
