Florida-based Riera Law Firm represents investors who were solicited by brokerage firms to invest in non-traded REITs, such as Hospitality Investors Trust, Inc. Brokers promoted Hospitality Investors Trust as stable principal preservation and high yield investments, while overlooking the lack of liquidity, high fees and risks.

Hospitality Investors Trust, Inc. (HIT), formerly known as American Realty Capital Hospitality Trust, Inc., is a non-traded real estate investment trust (REIT). On July 1, 2021, announced that the United States Bankruptcy Court for the District of Delaware (Case No. 21-10831 (CTG)) confirmed its plan for reorganization. In light of the reorganization, the existing shares of Hospitality Investors Trust’s common stock were cancelled and now investors' shares are likely worthless.

Non-traded REITs Carry Numerous Risks

The SEC and FINRA have both warned investors about the dangers of non-traded REITs investments. Non-traded REITs are complex products that involve certain risks and potential disadvantages that may not be apparent, or easy to understand. Non-traded REITs are illiquid and involve a high degree of risks. Non-traded REITs shares are not listed on a national exchange and are difficult to value because there is no market price readily available. Instead, their shares are sold directly and have high-up front fees of approximately 15% of the investment, which lowers the value and return of your investment. Distributions paid to investors are not guaranteed, they can be suspended for a period of time or halted altogether. While a non-traded REIT may allow investors to redeem their shares at a discount, they can restrict or terminate early redemption of shares. Non-traded REITs are high commission investment products, which can lead to marketing these investments to unsuitable investors. 

The Value of Hospitality Investors Trust’s Common Stock Plummeted

Since its inception, Hospitality Investors Trust had significant fluctuations in its per-share price. Hospitality Investors Trust was initially sold at $25.00 per share. By December 31, 2019, the value of HIT’s stock plummeted to an estimated net asset value of $8.35, a decline of approximately 67%. Under FINRA rules non-traded REITs, such as Hospitality Investors Trust, need to disclose an updated estimated net asset value per share on an annual basis. Hospitality Investors Trust did not report its 2020 estimated net asset value. 

From March 2021 to April 2021, Hospitality Investors Trust shares selling prices in a secondary auction market ranged from $0.35 per share to $0.46 per share.

Investors of Hospitality Investors Trust Options for Recovery of Losses

Investors need to consider their options given that the bankruptcy of Hospitality Investors Trust likely caused the value of their investment in the non-traded REIT to become worthless. Investors can file FINRA arbitration claims against the brokers and hold them responsible for your losses. Broker-dealer firms are subject to the securities laws, and as such, they are responsible for conducting proper due diligence on investments recommended to investors, and brokers must make suitable recommendations. 

If you invested in the Hospitality Investors Trust non-traded REIT and have suffered investment losses, you may be eligible for monetary recovery. Please contact Riera Law Firm at 305-204-9779 for a free case evaluation. We work on a contingency fee basis, meaning our firm receives a fee only if we recover money for you.