Phoenix Senior Living DST: Securities Investigation

Phoenix Senior Living DST Investors may have Claims

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

DSTs, known as Delaware Statutory Trusts, present an alternative avenue for 1031 exchange investors in search of replacement properties. They supposedly offer the potential for monthly income and diversification, all without the ongoing responsibilities of a landlord.

Phoenix Senior Living DST – Suitable for you?

According to SEC filings, Phoenix Senior Living DST, sponsored by Inland Private Capital Corporation, filed a Form D to raise capital from investors in 2019. The total offering amount was purportedly $53,544,255, according to the Reg D filing.

There are several reasons why Delaware Statutory Trusts, or DSTs, are a risky investment. Although DSTs may be suitable for some investors, they are not the best option for everyone due to their disadvantages.

One example is how 1031 DSTs cannot raise additional capital after the initial investment, which means that investors may be responsible for unexpected expenses, such as repairs, or a decrease 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.

The issue of illiquidity is also a primary concern when it comes to investing in a DST. This makes it difficult to find a buyer if an investor wants to sell their interest prior to sale of the property.

How to Recover your Investment Losses 

The White Law Group is investigating potential securities claims involving broker dealers who may have unsuitably invested its clients in a 1031 DST investment.

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.

Brokerage firms engage in broker due diligence to ensure they recommend and sell investment products suitable for their clients. This safeguarding process aims to protect both the brokerage firm and its clients by ensuring the investments align with the client’s investment objectives, risk tolerance, and financial situation.

The Financial Industry Regulatory Authority (FINRA) offers an arbitration platform enabling investors to resolve disputes if a broker or brokerage firm makes unsuitable investment recommendations or inadequately discloses associated risks. In a FINRA arbitration claim, brokers or firms might be held accountable for investment losses.

If you are concerned about your investment in Phoenix Senior Living 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.

For more information on The White Law Group and its representation of investors in FINRA arbitration claims, visit http://whitesecuritieslaw.com.