Written by The White Law Group• March 13, 2021• 8:11 pm• Blog, Current Investigations

Parking REIT Update – Declining NAV $11.75 Per Share

Parking REIT Update - Net Asset Value $11.75 Per Share, featured by top securities fraud attorneys, The White Law Group

Invest in the Parking REIT? Shareholders may be able to recover their losses through FINRA Arbitration.

The Parking REIT is an internally-managed, publicly registered, non-listed REIT that invests primarily in parking lots and garages in the United States. Its assets include 37 parking facilities located in 16 states. The REIT was formed during a merger between MVP REIT and MVP REIT II in 2017.

Amidst a myriad of problems for the REIT including 3 pending class action lawsuits, the company agreed in January to sell a majority stake to an affiliate of Bombe Asset Management LLC, a Cincinnati-based alternative asset management firm, according to an 8-K filing.

The agreement, in which Bombe will reportedly invest more than $125 Million, provides $35 million in cash plus the contribution of parking assets and other property valued at more than $90 million in exchange for operating partnership units valued at $11.75 per unit and warrants to purchase The Parking REIT common stock.

The company noted in filings, Bombe planned to tender approximately 15 percent of The Parking REIT’s outstanding shares of common stock for $11.75 per share in cash and also intended to purchase approximately 1.55 million shares of the REIT’s common stock for $11.75 per share from the REIT’s advisor and its affiliates, and CEO.

Shareholders have apparently been waiting for the company to update its net asset value (NAV) since May, after reported delays due to the Covid-19 global pandemic. The last reported NAV as of May 15, 2019 was $25.10.

On January 14, 2021 the Company announced an estimated per common share NAV of $11.75 per common share as of January 8, 2021. The Board of Directors said it relied upon information provided by the Company’s management team and the price per share and unit being paid in connection with the Bombe Transaction in determining the estimated NAV per share of Common Stock.Shares were originally sold for $25.00 each.

Potential Lawsuits to Recover Losses

Many investors are not fully aware of the problems and risks associated with non-traded REITs before purchasing them.

Real estate investment trusts (REITs) are complex and inherently risky products. Compared to traditional investments, such as stocks, bonds and mutual funds, REITs are significantly more complex and often better suited for sophisticated and institutional investors.

Non-traded REITs often lack liquidity. Investors looking to sell these investments often have difficulty finding a buyer, and if they are able to find one can suffer significant losses on the sale.

Broker dealers are required to perform adequate due diligence on any investment they recommend and to ensure that all recommendations are suitable for the investor. Firms that fail to do so, may be held responsible for any losses in a FINRA arbitration claim.