Park 205 Multifamily DST: Investor Lawsuit Investigation

Park 205 Multifamily DST – Investor Risk Alert

The White Law Group is investigating potential claims involving brokerage firms that recommended Park 205 Multifamily DST, a Delaware statutory trust (DST) sponsored by Trilogy Real Estate Group.

According to a Form D filed with the Securities and Exchange Commission, Park 205 Multifamily DST launched in 2021 and sought to raise approximately $25 million in equity. The offering, marketed as a 1031 exchange investment vehicle, was sold through a network of FINRA-registered broker-dealers, including firms such as Arete Wealth Management, Emerson Equity, and Dempsey Lord Smith, among others. The minimum investment was $25,000, and at least 80 investors participated.

Risks of DST Investments

While DSTs are often marketed as tax-efficient real estate investments for 1031 exchanges, they are high-risk and illiquid. Some of the key risks include:

• Illiquidity – Investors are generally unable to sell their interest prior to the trust’s liquidation event, which may take 7–10 years or longer.

• High Fees – Offering documents disclose significant commissions and fees, including acquisition, financing, asset management, and organizational expenses. In this case, more than $1.5 million in sales commissions and over $3.5 million in fees were estimated.

• Concentration Risk – Investors are exposed to a single property or a small pool of properties, creating limited diversification.

• Market and Performance Risk – Returns depend heavily on property performance and market conditions, which may be impacted by rising interest rates, declining rental demand, or broader economic downturns.

For many investors, particularly retirees seeking stable income, these risks may outweigh the potential benefits.

FINRA Arbitration for Investor Claims

If your financial advisor recommended Park 205 Multifamily DST without fully disclosing the risks, you may have a claim for recovery of losses. Brokerage firms are required under FINRA rules to perform adequate due diligence on private placement offerings and to ensure investments are suitable for each customer’s risk tolerance, investment objectives, and financial situation.

Investors who have suffered losses may be able to file a claim through FINRA arbitration, a private dispute resolution forum where many securities cases are resolved. Unlike class actions, FINRA arbitration is an individualized process that often provides a faster path to potential recovery.

FAQs

1. What is a DST investment?
A Delaware Statutory Trust (DST) is a legal entity that allows multiple investors to pool money to purchase real estate. DSTs are frequently used in 1031 exchanges for tax deferral purposes but are considered complex, illiquid, and speculative investments.

2. Why are DSTs risky?
DSTs typically involve high upfront fees, lack of liquidity, reliance on a single property’s performance, and vulnerability to market shifts. These risks can make them unsuitable for conservative investors seeking stable, accessible income.

3. What can I do if I lost money in Park 205 Multifamily DST?
If you suffered financial losses, you may be able to pursue a claim against the brokerage firm that sold the investment. These claims are often pursued through FINRA arbitration, where investors can potentially recover damages for unsuitable recommendations or misrepresentation.

The White Law Group Can Help

The White Law Group has represented hundreds of investors in claims against brokerage firms for unsuitable investment recommendations, including those involving DSTs. If you invested in Park 205 Multifamily DST and are concerned about your losses, please contact us for a free consultation at (888) 637-5510.