Moody National REIT II Shareholder Investment Losses
Have you suffered losses investing in Moody National REIT II? If so, The White Law Group may be able to help you by filing a FINRA Dispute Resolution claim against the brokerage firm that sold you the investment.
According to their website, Moody National Companies is a full-service commercial real estate firm. The company says its focused on “investment opportunities that offer long-term asset preservation as well as stable and predictable cash flows”.
Moody National REIT II, a non-traded REIT, has a portfolio of 15 hotels. According to recent filings with the SEC, the REIT has been severely impacted by the Covid-19 pandemic and has postponed its valuation to a later date. Shares were originally offered for $25 per share, but according to Central Trade and Transfer, a secondary market for non-traded investments, shares are currently listed to sell for just $8 per share.
Unfortunately for investors, the REIT terminated its IPO and suspended its offering, distributions, and share repurchase program in April 2020.
Moody National REIT II Faces Extreme Labor Shortages
The company recently provided an operational update on June 30, 2022 noting that the company’s 2022 RevPAR year-to-date was $77.45 compared to 2019 RevPAR of approximately $100.
RevPAR, or revenue per available room, is a performance metric in the hotel industry that is calculated by dividing a hotel’s total guestroom revenue by the room count and the number of days in the period being measured.
This 2022 RevPAR was an increase of approximately 65% from 2021 performance. The company further noted that it continues to face “extreme labor shortages” that limited the REIT’s ability to increase occupancy. The company says “hotel staff simply can’t service all of the rooms.”
Risks of Non-traded REITs
A real estate investment trust (REIT) is a company that owns, and in most cases, operates income-producing real estate. REITs own many types of commercial real estate, ranging from office and apartment buildings to warehouses, hospitals, shopping centers and hotels. Some REITs also engage in financing real estate. The REIT structure was designed to provide a real estate investment structure similar to the structure mutual funds provide for investment in stocks.
REITs are complex and high risk investments that are really only suitable for sophisticated investors. It is the duty of the brokerage firm to perform due diligence on any investment and to 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.
Financial advisors have a fiduciary duty to put their client’s needs ahead of their own. If a stockbroker recommends an investment that is unsuitable for the client or fails to perform adequate due diligence on an investment, the advisor and his/her firm can be held liable for the resulting losses.
The White Law Group continues to investigate the liability that brokerage firms have for unsuitably recommending REITs such as Moody National REIT II.
If you believe that you are the victim of your financial advisor recommending a REIT to you inappropriately, please call the securities attorneys of The White Law Group at (888)637-5510 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 Seattle, Washington. For more information on The White Law Group visit https://www.whitesecuritieslaw.com.
For more information on the firm’s investigation please see:
Moody National REIT II Impacted by COVID-19 Pandemic or Moody National REIT II, Investors may have Claims
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