The Wolper Law Firm is currently representing clients in the recovery of investment losses realized in American Realty Capital n/k/a American Finance Trust (AFIN). At the initial offering, and when most investors purchases AFIN, American Realty Capital n/k/a American Finance Trust (AFIN) was a non-traded real estate investment trust (“Non-Traded REIT”). In July 2015, American Realty Capital became publicly traded and changed its name to American Finance Trust (AFIN). Through this public offering, A class shares became publicly traded. The remaining “B” shares are still non-traded.
Non-Traded REITs are securities that do not trade on a public securities exchange. For this reason, Non-Traded REITs can be illiquid, meaning investors may be unable to sell their investments on demand. The underlying collateral of the REITs consists of income producing residential or commercial real estate. Typically, the commissions generated on Non-Traded REITs are higher than industry norm (approx. 7%) and the investments themselves may be subject to extreme volatility due to associated risk factors. Non-Traded REITs are only suitable for investors with a long-term investment horizon who are willing to accept higher levels of risk in their investments.
AFIN is managed by American Financial Realty Trust, which is principally owned by Nicholas Schorsch. Mr. Schorsch and American Financial Realty Trust have recently been the subject of regulatory scrutiny and shareholder lawsuits that have resulted in settlements measuring in the tens of millions.
The prospectus for the American Realty Capital n/k/a American Finance Trust (AFIN) states that the investment “involves significant risk and is suitable only for persons who have adequate financial means, desire a relatively long-term investment and will not need immediate liquidity from their investment.” Many financial advisors pitched Non-Traded REITs as safe, income producing investment vehicles. In reality, Non-Traded REITs are only suitable for those investors with aggressive risk profiles who have a long-term investment horizon.
In July 2018, the price of American Realty Capital n/k/a American Finance Trust (AFIN) sharply declined by approximately 40% after a competing REIT made a tender offer of $15.00 for outstanding shares of AFIN that came to market after the once Non-Traded REIT went public.
If you or someone you know invested in AFIN and experienced investment losses, please contact the Wolper Law Firm at 800.931.8452 or by email at email@example.com to discuss your specific situation and the legal options available. The Wolper Law Firm represents investors nationwide in securities litigation and arbitration.
Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters.