Securities Lawyers Blog
The securities lawyers of Gana Weinstein LLP are investigating recommendations by brokerage firms for their clients to invest in Hospitality Investors Trust – a non-traded real estate investment trust (non-traded REIT). Hospitality Investors Trust REIT, formerly known as American Realty Capital Hospitality Trust, originally sold shares for $25.00. As of December 31, 2019, the fund has approved an estimated net asset value per share of $8.35 as massive loss to initial investors. Even worse, secondary market trading sources cite a far smaller value at only $.75 a share – implying that the trading markets anticipate that Hospitality Investors Trust is virtually worthless.
Hospitality Investors Trust states that it is a publicly registered non-traded real estate investment trust (REIT) which owns a diversified portfolio of strategically-located hotel properties throughout North America within the select service and full-service markets of the hospitality sector.
Even prior to the recent recession and COVID-19 related market issues, Hospitality Investors Trust suspended the company’s share repurchase program effective February 28, 2019. Thus, well before recent market events investors could not redeem their shares even at the prices the fund stated the investment was worth.
Recently, the REIT stated that “the Company has the responsibility to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about its ability to meet its obligations arising within one year after the date that the financial statements are issued. Due to the existence of certain events of default under the Company’s debt obligations…the Company is unable to conclude with certainty that it is probable that it will be able to meet its obligations arising within twelve months of the date of issuance of these financial statements…” In other words, Hospitality Investors Trust REIT is questionable as a going concern at this point.