On July 25, 2013, Corporate Properties Associates 16 (CPA 16) entered into a merger agreement with the publicly traded REIT, W.P Carey Inc (NYSE: WPC). Although the merger will provide liquidity to CPA 16 investors, many are still concerned. Investors seeking to sell their CPA 16 shares can expect to get approximately $9.50 per share as of July 2013 on the secondary market.
According to CPA 16 Form 425, the acquisition of CPA 16 has a transaction value of $4 billion. The combined company will have total enterprise value of approximately $10.1 billion and contain more than 700 properties. Each share of CPA 16 will be converted to W.P. Carey stock based on a floating exchange ratio and fixed value of $11.25 per share.
Regardless of the estimated per share value, many investors should not have been invested in CPA 16 to start. Non-traded REITs, such as CPA 16, are illiquid and complex investments that involve a high degree of risk, In order to appeal to retired investors, non-tradedREITS were often they were portrayed as “safe” investments that would provide consistent returns. Unfortunately, some broker dealers may have overlooked suitability requirements when recommending CPA 16 to clients.
Broker dealers have a fiduciary duty to make investment recommendations that are consistent with a client’s age, risk tolerance, investment objectives, and net worth among others. To the extent that some broker dealers inappropriately sold CPA 16 investments by overlooking suitability requirements and/or through misrepresentation, they may be help responsible for any resulting losses in a FINRA arbitration claim
The White Law Group is investigating FINRA claims regarding the sales of non-traded REITs on behalf of investors. To read more about our investigation into W.P. Carey visit our post here.
If you invested in Corporate Properties Associates 16 or another non-traded REIT and would like to discuss you litigation options, please call the securities attorneys of The White Law Group at 312-238-9650 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 Boca Raton, Florida.
For more information on The White Law Group, visit http://whitesecuritieslaw.com
