Procaccianti Hotel REIT Investigation

Procaccianti Hotel REIT Limits Redemptions 

The White Law Group continues to investigate potential securities claims involving Procaccianti Hotel REIT.  If you  have suffered investment losses, the securities attorneys at The White Law Group may be able to help you by filing a FINRA Dispute Resolution claim. 

Procaccianti Hotel REIT, a publicly registered non-traded REIT sponsored by Procaccianti Companies Inc., raised $550 million in its initial public offering launched in August 2018. The company invests in hospitality properties including select-service, extended-stay, and compact full-service hotel properties throughout the United States.  

On August 22, 2023, Procaccianti made an announcement regarding its share repurchase plan. The company’s board of directors determined that it had reached the maximum limit for share redemptions permitted under its amended and restated repurchase plan for the quarter ending June 30, 2023. Under this plan, Procaccianti restricts redemptions to 5% of the outstanding shares within the past 12 months. These redemptions are contingent upon the availability of funds authorized by the board of directors. 

Procaccianti further disclosed its intention to redeem, on a pro rata basis, 19.7% of the share redemption requests submitted during the second quarter of 2023. However, the company reportedly clarified that it would fully honor redemption requests related to stockholder death. IProcaccianti concluded its public and private offerings in August 2021. 

As of June 30, 2023, Procaccianti reported total assets amounting to approximately $112 million, along with outstanding mortgage debts totaling approximately $65 million. The company maintains ownership interests in five select-service hotels situated across four states, collectively offering a total of 559 rooms.  As we reported, Procaccianti previously suspended its common stock offering and distribution reinvestment plan in April 2020.   

Secondary Sales Price – $4.25 per Share 

According to Central Trade and Transfer, a secondary marketplace for non-traded REITs, shares of Procaccianti Hotel REIT were listed for sale for just $4.25 per share. This may indicate significant losses for investors as the original offering price was $10.00 per share. 

Risks of Non-Traded REITs 

The White Law Group is currently investigating potential claims against brokerage firms who may have unsuitably recommended non-traded REITs to investors. 

Non-traded Real Estate Investment Trusts (REITs) pose specific risks that investors should carefully consider. First, liquidity risk is a significant concern. Unlike publicly traded REITs, non-traded REITs are not listed on stock exchanges, making it challenging to sell or redeem shares easily. Investors may find themselves locked in their investments for several years, potentially limiting access to their capital when needed. 

Secondly, valuation risk is prevalent in non-traded REITs. These investments often lack transparent pricing mechanisms, making it difficult to ascertain the true value of shares. Investors may face uncertainty about the accuracy of reported net asset values (NAVs), which can impact their understanding of the investment’s performance and potential returns. Moreover, non-traded REITs frequently charge substantial fees and commissions, which can erode returns over time. Investors should carefully weigh these risks and consider their investment horizon, objectives, and risk tolerance before investing in non-traded REITs. 

Brokers have a responsibility to perform due diligence on an investment before recommending it to their clients. If you have suffered losses due to an unsuitable investment recommendation, you may be able to recover your losses through FINRA arbitration. 

If you are concerned about your investment in Procaccianti Hotel REIT, 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 nationally recognized law firm specializing in securities fraud, securities arbitration, investor protection, and securities regulation/compliance. Our primary commitment is to assist investors across all 50 states in pursuing claims against their financial professionals or brokerage firms. Since our establishment in 2010, we have successfully managed over 700 FINRA arbitration cases. 

Our firm is dedicated to representing investors in a wide range of securities-related claims. These include cases involving stock fraud, broker misrepresentation, churning, unsuitable investments, selling away, unauthorized trading, and various other securities issues. 

With a wealth of experience exceeding 30 years in the field of securities law, The White Law Group possesses the knowledge and skills necessary to help you recover your investment losses. To learn more about our services and how we can assist you, please visit our official website at http://whitesecuritieslaw.com.