NB Gathering DST: Recovery of Investment Losses

 The White Law Group is investigating potential securities claims involving broker dealers who may have improperly recommended NB Gathering DST to investors.

NB Gathering DST, sponsored by Nelson Partners Student Housing, is a Class A Student Housing community complex near Western Washington University, built in 2017. Nelson Partners has reportedly been the subject of several lawsuits, foreclosures, and bankruptcies in connection with other student housing properties.

According to SEC filings, NB Gathering DST, sponsored by Nelson Partner based in San Clemente, CA, filed a Form D to raise capital from investors. The total offering amount sold was purportedly $12,009,835, according to the Reg D filing. The sales commissions and fees were estimated at more than 10% of the total offering amount. 

NB Gathering DST: 1031 DST Investment

DST Investments

Delaware Statutory Trusts, or DSTs, are an alternative for 1031 exchange investors seeking replacement properties, allegedly offering the potential for monthly income and diversification without any on-going landlord duties.   

While there is a time and place for most investments, DSTs may not be appropriate for many investors as they come with a few disadvantages.  For example, 1031 DSTs typically cannot raise new capital once the investment is made leaving investors holding the bag if expensive repairs are needed or other issues arise – like a drop in occupancy or rental income. The investors also have limited control over the property. 

While the sponsor may welcome feedback from the investors in the DST, they don’t allow any actions to be taken by any one investor. 

Additionally, 1031 DSTs are illiquid, and it can often be difficult to find a buyer if an investor wants to sell their interest before the property is sold. 

High-Risk Investments

The White Law Group is investigating the liability that FINRA registered brokerage firms may have for improperly recommending high-risk investments to investors.  

Despite the risks of investing in DSTs, brokerage firms continue to push this type of investment because of the high commissions associated with their sale and creation.  

Fortunately, FINRA does provide an arbitration forum for investors to resolve disputes if a broker or brokerage firm makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment. It is possible that they could be found liable for investment losses in a FINRA arbitration claim.  

Free Consultation with Securities Attorneys

If you are concerned about your investment in NB Gathering DST, please call the securities attorneys at 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.