The Securities Litigation attorneys at Colling Gilbert Wright PLLC have filed dozens of NorthStar Healthcare REIT-related Investor Lawsuits
Many investors have suffered substantial losses after investing in NorthStar Healthcare Income Real Estate Income Trust (REIT) at the unsuitable recommendation of broker dealers and their registered representatives.
The securities lawyers at Colling Gilbert Wright PLLC are investigating claims from investors whose broker dealers did not inform them of the risks of such an investment and/or neglected the factors of their clients’ risk tolerance, age, investment experience, or age. If you sustained financial loss from your investment in NorthStar Healthcare REIT, our firm may file a Financial Industry Regulatory Authority (FINRA) Dispute Resolution claim on your behalf and work to hold accountable for your losses the brokerage firm that sold you this investment.
About NorthStar Healthcare REIT:
NorthStar Healthcare Income, Inc. (also known as NorthStar Healthcare) was created to build, acquire, and asset manage a diversified portfolio of healthcare real estate equity, securities, and debt investments. Northstar Healthcare Income REIT’s prospectus establishes minimum suitability standards for a purchaser of the investments, meaning the investments are not suitable for many investors. Also, numerous states also imposed additional requirements to be met before investors were permitted to purchase shares of Northstar Healthcare Income REIT.
Northstar Healthcare Income REIT, like other non-traded REITs, paid brokers and Financial Advisors significant upfront commissions. The Northstar Healthcare REIT estimates that it paid Selling Commissions of 7% upfront according to the Prospectus, and another 6% or more in other fees and costs. Thus, approximately 86.5% or less of an investor’s capital was actually available for investment by the manager. In other words, a significant portion of the money investors paid to purchase the Northstar Healthcare Income REIT was immediately diverted to their broker/financial advisor and the REIT manager.
According to the NorthStar Healthcare distributions updates, the REIT’s board met on February 1, 2019, and decided to stop paying dividends. The decision followed a deep analysis of the entity’s business, financial health, liquidity sources, and capital requirements, which directed a strategy of preserving capital and suspending monthly distribution payments to stockholders. This was bad news for investors who relied on income from their investment.
Under FINRA rules and suitability evaluation requirements, a broker dealer’s responsibility for investment-related losses is clear. The investment professionals and their firms are ethically bound to tell their clients about the risks associated with any recommended investment. A broker has an ethical obligation, too, to consider an investor’s risk tolerance, age, investment experience, and net worth when determining whether a certain investment is suitable for the client. When a broker fails to fulfill these obligations, the firm that employs them may be held accountable for losses suffered by an investor to whom an unsuitable investment recommendation was made.
If you have experienced losses in the NorthStar Healthcare Income REIT or any other Real Estate Investment Trust or Business Development Company (BDC non-conforming /alternative investment), please contact our firm for a complimentary case evaluation. Thank you.