Moody National REIT II Lawsuits: Shareholders to Vote on Liquidation Plan
Have you suffered investment losses in Moody National REIT II?
The White Law Group is investigating potential securities lawsuits involving investments in Moody National REIT II, a publicly registered non-traded real estate investment trust (REIT) focused on hospitality properties. If your financial advisor recommended this high-risk investment, you may be able to recover losses through FINRA arbitration.
Moody National REIT II Seeks Shareholder Approval for Liquidation
As of July 2025, stockholders of Moody National REIT II are scheduled to vote on September 30, 2025, on a plan to liquidate and dissolve the company. The board of directors approved the plan in April 2025, following years of financial struggles and mounting debt obligations.
The REIT plans to:
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Sell its remaining hotel properties;
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Pay off its outstanding debts;
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Distribute any remaining proceeds to shareholders.
The company cited the COVID-19 pandemic as having a lasting negative impact on its financial condition. Since March 2020, the REIT:
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Terminated its public offering of shares;
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Suspended distributions to investors;
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Halted its share repurchase program.
If stockholders do not approve the liquidation, the company may attempt to continue operations or reconsider liquidation at a future date.
Recent Hotel Sales & Foreclosure Events
Moody National REIT II has sold several properties in recent months, many at a loss:
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Embassy Suites Nashville – Sold April 11, 2025, for $57.5 million (original purchase: $66.3 million in 2015 by Moody National REIT I).
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Residence Inn Austin – Sold February 6, 2025, for $20.5 million (original purchase: $27.5 million in 2015).
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Residence Inn Grapevine – Sold February 6, 2025, for $22.5 million (original purchase: $20.5 million in 2014).
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TownePlace Suites Fort Worth – Sold December 10, 2024, for $9.1 million.
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Courtyard Marriott Lyndhurst – Sold March 21, 2025, for $21.3 million.
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Hilton Garden Inn Austin – Foreclosed on May 2, 2025, to satisfy a $16.2 million mortgage note.
As of March 31, 2025, the REIT reported $254 million in total assets, including ownership of 11 hotel properties.
Declining NAV and Debt Maturity Concerns
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The REIT’s net asset value (NAV) per share declined from $19.45 in December 2022 to $17.25 in July 2024.
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As of March 2024, 38% of the REIT’s $228 million in debt was set to mature by year-end.
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The board has repeatedly warned that the REIT may fail to meet debt obligations without liquidation.
Share Redemption Program & Distributions Remain Suspended
The share redemption program and shareholder distributions, both suspended in April 2020, remain inactive. According to the company, these programs will not resume until operational cash flow is sufficient to meet:
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Payroll and mortgage obligations;
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Repayment of a $50 million loan from Moody National Capital, LLC.
Tender Offer Suggests Significant Losses for Investors
In April 2024, Comrit Investments 1 LP offered to purchase Moody shares for $9.09 per share. At that time, the REIT had previously reported a NAV of $19.45 as of year-end 2022.
According to LODAS, a secondary marketplace, shares recently sold for just $8.25, a steep decline from the original offering price of $25 per share.
Risks of Investing in Non-Traded REITs Like Moody National REIT II
Non-traded REITs are high-risk, illiquid investments often unsuitable for average investors. These investments do not trade on public exchanges and can be difficult to sell except at steep discounts on the secondary market.
Your broker has a fiduciary duty to perform due diligence and to recommend only suitable investments based on your age, net worth, investment objectives, and risk tolerance. If your advisor failed to assess your suitability for an investment in Moody National REIT II, you may have grounds for a FINRA arbitration claim.
Class Action vs. Individual FINRA Arbitration
While class actions can be effective for investors with small losses, investors with losses of $100,000 or more may benefit from filing an individual FINRA arbitration claim. Arbitration is often faster and more tailored to your specific circumstances.
Free Consultation with a Securities Fraud Attorney
If you are concerned about your investment in Moody National REIT II, please call The White Law Group at (888) 637-5510 for a free consultation.
The White Law Group is a national securities arbitration and investor protection law firm with offices in Chicago and Seattle. We have recovered millions of dollars for investors nationwide in claims against brokerage firms and financial advisors.
Frequently Asked Questions (FAQs)
1. Why is Moody National REIT II liquidating?
The REIT is seeking shareholder approval to liquidate due to mounting debt, underperformance, and years of financial difficulty exacerbated by the pandemic.
2. Can I sell my shares in Moody National REIT II?
The share redemption program remains suspended. Shares may be sold on a secondary market, but often at a significant loss compared to the original offering price.
3. How can I recover my losses in Moody National REIT II?
You may be eligible to file a FINRA arbitration claim against the broker-dealer who recommended the investment if it was unsuitable based on your financial profile.
