InPoint Commercial Real Estate Income Suspends Offering, Repurchases
InPoint Commercial Real Estate Income Inc., a commercial mortgage non-traded REIT, announced the company has temporarily suspended its continuous public offering and share repurchase plan as of Feb. 10, 2023, according to an 8-K filing with the SEC.
The company reportedly said the suspension was due to the pace of fundraising in their current public offering and the amount of monthly redemption requests, which are currently in excess of its fundraising.
The primary offering, share repurchase plan, and distribution reinvestment plan will reportedly remain suspended until further notice. InPoint noted it plans to evaluate strategic alternatives available to the company.
In 2020, the board suspended the company’s public offering, share repurchase plan, distributions, and distribution reinvestment plan during the COVID-19 pandemic, as we previously reported.
InPoint Commercial REIT is just one of several non-traded REITs that have halted redemptions in the past few months, possibly due to the rising interest rates. See Starwood Real Estate Income Trust Limits Redemptions and Blackstone REIT (BREIT) Limits Redemptions
Risks of Non-Traded REITs
The trouble with non-traded REITs is that they are complex and inherently risky products. Lack of liquidity is often problematic for many investors. Investors looking to sell often have difficulty finding a buyer, and when they do, can suffer significant losses on the sale.
To learn more, see: Non-traded REITs “Liquidity Issue”
Further, the investment itself is unsuitably risky because it is dependent on the overall health of specific sectors of the economy.
Non-traded REITs are often less regulated than other types of investments (i.e., mutual funds, stocks, etc.) and generally pay a higher sales commissions and fees than these other products.
Recovery of Investment Losses
The White Law Group is investigating FINRA arbitration claims involving broker dealers who may have improperly recommended mortgage REITs to investors.
Brokerage firms are required to perform due diligence on any investment they recommend, including mortgage REITs. They must ensure that the investment is suitable for a particular investor in light of that investor’s age, investment objectives, income, net worth, and investment experience. Given the current risk of devaluation of these REITs, such investments are likely only suitable for wealthy and/or sophisticated investors.
If you have suffered losses in Inland Commercial Real Estate Income Inc. , please call the securities attorneys of The White Law Group at (888)637-5510 for a free consultation.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Seattle, Washington
For more information on the firm, please visit https://whitesecuritieslaw.com.
Tags: InPoint Commercial Real Estate Income class action, InPoint Commercial Real Estate Income complaint, InPoint Commercial Real Estate Income lawsuit, InPoint Commercial Real Estate Income mortgage reit, InPoint Commercial Real Estate Income recovery options, InPoint REIT losses Last modified: February 7, 2023
