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Written by 5:24 pm Blog, Current Investigations

Steadfast Apartment REIT Lowers Distribution Rate

Steadfast Apartment REIT Lowers Distribution Rate, featured by top securities fraud attorneys, The White Law Group

Concerned about your investment in Steadfast Apartment REIT?

The White Law Group continues to investigate securities lawsuits involving the liability that broker dealers may have for improperly recommending non-traded REITs such as Steadfast Apartment REIT Inc. to  investors.

Steadfast Apartment REIT, a publicly registered non-traded REIT, invests in apartment communities in the United States. The REIT owns and/or manages a $3.4 billion portfolio of 70 apartment communities in 14 states, according to the DI Wire. Last March the REIT reportedly completed its mergers with affiliated non-traded REITs, Steadfast Income REIT Inc. and Steadfast Apartment REIT III, Inc. 

According to an 8-K filing with the SEC on January 14, the REIT has just lowered its distribution rate and amended its share repurchase plan (SRP) to limit repurchase requests to death or qualifying disability only in order to “ensure sufficient liquidity.”

The new annualized distribution payment for a share of common stock will reportedly be $0.5250, a decrease from the annualized distribution payment of $0.90 per share that has been paid in the past and will be effective in March. 

As of March 6, 2020, the company’s net asset value is $15.23 per share.

The company stated that the amended SRP will be limited to instances of death and qualifying disability beginning at the end of April 2021 and that share repurchase requests that don’t meet the requirements of death or qualifying disability will be cancelled (including redemption requests received in the first quarter of 2021). Death and disability requests will reportedly be  limited to $3 million per quarter.

Recovery of Investment Losses

The White Law Group is investigating potential securities fraud claims involving broker-dealers’ improper recommendation that investors purchase high-risk non-traded REIT investments. Many investors are not fully aware of the problems and risks associated with these investments 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.

Another problem often associated with REIT recommendations is the high sales commissions brokers typically earn for selling REITs – as high as 15%.  Brokers have an obligation to make investment recommendations that are consistent with their clients risk tolerance, net worth, investment objectives and experience in the market.

Unfortunately, in many cases, the high sales commission may provide some brokers with enough incentive to make unsuitable investment recommendations.

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.

If you are concerned about investment losses in Steadfast Apartment REIT and would like a free consultation with a securities attorney, please call The White Law Group at 888-647-5510.

The White Law Group is a national securities arbitration, securities fraud, and investor protection law firm with offices in Chicago, Illinois.

For more information on The White Law Group, visit www.whitesecuritieslaw.com.





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