Practice Area · Alternative Investment Losses

Non-Traded REIT & BDC Loss Attorney

Non-traded REITs and BDCs pay brokers 7 to 10 percent commissions, cannot be sold on any exchange, and carry valuation uncertainty that can hide losses for years. When brokers recommend them to investors who need liquidity, income, or capital preservation, the results are often devastating.

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What These Products Are

High Commissions. No Exit. Values You Cannot Verify Until It Is Too Late.

Non-traded Real Estate Investment Trusts and Business Development Companies are investment vehicles that raise capital from retail investors through broker networks and invest in real estate portfolios or portfolios of loans to middle-market businesses, respectively. They are structured similarly to their publicly traded counterparts, but with one critical difference: they are not listed on any stock exchange.

That absence of a public listing has profound consequences for retail investors. There is no daily market price to reveal current value. There is no secondary market where investors can sell their shares when they need cash. There is only the issuer's own redemption program, which can be suspended at any time and typically limits redemptions to a small fraction of shares outstanding each quarter. Investors who need their money back may find that access to their own capital is effectively unavailable for years.

Traded vs. Non-Traded

The Critical Differences Between Traded and Non-Traded REITs

Publicly Traded REITs (Exchange-Listed)

  • Listed on NYSE or Nasdaq; bought and sold daily like stocks
  • Market price reflects current investor sentiment and asset values
  • Price transparency: investors know current value at all times
  • Standard brokerage commissions, typically minimal
  • SEC-required quarterly and annual financial reporting
  • Can be sold immediately when investor needs liquidity

Non-Traded REITs

  • Not listed; no daily market; cannot be sold when needed
  • Broker commissions typically 7 to 10% of purchase price
  • Stated value remains at offering price for years regardless of performance
  • Redemption programs typically limited and can be suspended
  • True current value often unknown until a liquidity event occurs
  • Upfront sales load plus ongoing management fees reduce returns
The Regulatory Framework

What FINRA Required Before Any Non-Traded REIT Could Be Recommended

  • FINRA Rule 2310 (Direct Participation Programs): Imposes specific suitability requirements for direct participation programs including non-traded REITs, requiring brokers to obtain information about the customer's financial condition, tax status, and investment objectives and to document the basis for concluding the investment is suitable.
  • FINRA Regulatory Notice 09-09: Specifically addressed non-traded REIT suitability, emphasizing that brokers must conduct a meaningful suitability analysis that goes beyond confirming the investor meets minimum income and net worth thresholds, and that concentration in illiquid investments must be considered.
  • Regulation Best Interest: Requires brokers to act in the retail customer's best interest when recommending non-traded REITs, including full consideration of the illiquidity risk, the commission conflict, and whether the investor has adequate liquidity outside the investment to meet their financial needs during the entire holding period.
  • FINRA Rule 2121 and Pricing Disclosure: Requires that the estimated per-share value of non-traded REITs be disclosed to investors on account statements, and that brokers not represent the original offering price as the current market value when the sponsor has published a different estimated value.
Why Jorge Riera

Non-Traded REIT and BDC Experience Built on Regulatory Knowledge and Forensic Financial Precision

Non-traded REIT and BDC cases require demonstrating both that the investment was unsuitable and that the investor's true economic position is materially worse than what their account statements reflect. The valuation opacity that characterizes these products makes forensic financial analysis particularly important, and Jorge L. Riera's CPA credentials and SEC enforcement background are directly suited to that work.

CPA Advantage in Valuation and Damages Analysis

Quantifying non-traded REIT damages requires assessing the current fair value of the investment, calculating the true total return including all fees and distributions, and comparing that outcome to a suitable liquid alternative. Jorge's CPA credentials enable faster case evaluation, better direction of financial expert work, and stronger cross-examination of firm damages experts at the arbitration hearing.

Product Case Designation Strategy

Non-traded REIT cases may qualify for FINRA's product case designation, which triggers significantly expanded discovery obligations on the respondent firm, including production of due diligence files, compliance review records, and internal communications about the product's risk profile. As one of only 7 Public Members of FINRA's National Arbitration and Mediation Committee, Jorge has institutional knowledge of how to secure and leverage this designation effectively.

All non-traded REIT and BDC claims are handled on a contingency fee basis. No legal fee unless we recover.

Case costs and expenses are payable from any recovery as provided in the written engagement agreement.


Schedule Your Free Consultation

or call (305) 204-9779

Common Questions

Non-Traded REITs and BDCs: Frequently Asked Questions

Not necessarily. Non-traded REITs typically report the original offering price as the stated value on account statements until the sponsor publishes a formal estimated per-share value, which may take years. During that period, the actual economic value of the investment may be significantly below the stated value, particularly if the real estate portfolio has declined or if management fees have reduced the net asset value. The stated value on your account statement is not a reliable indicator of the investment's current fair value.
Suspension of a redemption program is a significant harm to investors who need liquidity and demonstrates that the liquidity risk you were exposed to was real. It also supports the argument that the investment was unsuitable for any investor who needed access to their capital during the holding period. You can still pursue a FINRA arbitration claim against the broker who recommended the investment without needing to first exit the position. The suspension itself may be part of the damages claim.
No. Meeting minimum income and net worth thresholds is a necessary but not sufficient condition for suitability. The broker was also required to evaluate whether the illiquid, alternative nature of the investment was consistent with your investment objectives, risk tolerance, liquidity needs, and the overall concentration of your portfolio in similar products. FINRA has specifically cautioned that passing the income and net worth test does not end the suitability analysis for non-traded REITs.
No Fee Unless We Win

You Cannot Sell It. You May Not Know What It Is Worth. But You May Be Able to Recover.

Non-traded REIT and BDC losses caused by unsuitable recommendations, inadequate disclosure, or excessive commissions are recoverable through FINRA arbitration against the broker who sold them. Contact the firm for a free, confidential evaluation.

Request a Free Case Evaluation

or call (305) 204-9779

Attorney Credentials

Jorge L. Riera, Esq., CPA, CGMA, MAcc · Former SEC Senior Enforcement Counsel · FINRA NAMC Public Member & Expungement Subcommittee Chair · AV Preeminent (Martindale-Hubbell) · Avvo 10.0 · PLI Securities Arbitration Faculty 2026 · Contingency Fee Representation