National investment loss lawyers KlaymanToskes is investigating brokerage firms and brokers/investment advisors who recommended Griffin-American Healthcare REIT IV to their customers, when the investment was illiquid for a share price of $10. The REIT has lost 60% of its market value since its reverse stock split share price of $31.40, and the completion of its initial public offering, during which American Healthcare REIT (NYSE: AHR) shares were sold at the bottom of their marketed range.
If you suffered investment losses in excess of $100,000 in Griffin-American Healthcare REIT IV and/or any other illiquid REITs and Business Development Companies (“BDCs”) due to unsuitable recommendations by your broker/financial advisor, contact attorney Lawrence L. Klayman at (888) 997-9956 or lawrence@klaymantoskes.com for a free consultation to discuss recovery options.
American Healthcare REIT, formerly known as Griffin-American Healthcare REIT IV, is a real estate investment trust (“REIT”) that acquires, owns and operates a portfolio of clinical healthcare real estate properties. Shares of American Healthcare REIT’s common stock began trading under the symbol AHR on the New York Stock Exchange on February 7, 2024, with Bank of America and Morgan Stanley acting as lead book-running managers for the offering.
In its 2018 Prospectus filing with the Securities and Exchange Commission (“SEC”), the REIT stated that its investment offering “involves significant risk and is only suitable for persons who have adequate financial means, desire a relatively long-term investment and who will not need immediate liquidity from their investment.”
The REIT’s estimated net asset value (NAV) per share for Class T and Class I common stock was $31.40 as of December 31, 2022 after a 4 – 1 reverse stock split. The company expected an IPO share price ranging from $12 to $15 per share, however, 56 million shares were sold at a price of $12 per share, falling on the lower end of the marketed range, and leading to a market value loss of over 60% for investors since the company’s reverse stock split.
On March 15, 2023, American Healthcare REIT’s board of directors authorized a reduced quarterly distribution from $0.40 per share to $0.25 per share to the company’s Class T and Class I common stockholders of record as of the close of business on April 4, 2023, for 2023 Q1. According to the REIT’s board, the reduced distribution was a result of the REIT’s need to preserve liquidity to help the company “achieve its long-term strategic goals.” Back in 2020, the REIT cut its distributions in half from an annualized rate of $0.60 per share to $0.30 per share, beginning with the April 2020 distribution, which was to be paid on May 1, 2020.
On January 11, 2024, American Healthcare REIT responded to a third-party tender offer from Comrit, seeking to purchase up to 228,136 shares of the REIT at a 58% discount to its most recently estimated NAV per share. The REIT’s board noted that Comrit’s offer price of $13.15 per share was equivalent to $3.29 per share prior to the 4 – 1 reverse stock split. The REIT previously suspended its share repurchase plan (SRP) in November 2022 except for requests resulting from the death or qualifying disability of stockholders. According to its Board, the secondary sales prices from September to December 2023, on CTT Auctions were in a range of $14.36 to $15.25 per share, 9-16% higher than the Comrit tender offer price.
A significant number of investors remain unaware of the risks and liquidity issues associated with Non-traded REITs. Compared to conventional stocks and mutual funds, REITs are considerably more complicated and come with a greater degree of risk, largely because of their illiquid nature. The brokers and financial advisors responsible for selling American Healthcare REIT may be held responsible for any financial losses sustained by investors.
Potential conflicts of interest may arise when issuers incentivize brokers/investment advisors with substantial commissions to promote their financial products. A problem often associated with REIT investment recommendations is the high sales commissions brokers typically earn for selling REITs, which can be as high as 15%.
A representative or firm that recommends investments for the purpose of being compensated through increased commissions, and enriches themselves rather than benefiting the client, is violating securities laws. KlaymanToskes can help you determine if your loss is due to financial advisor misconduct, unsuitable investment advice, and/or other securities violations.
Financial professionals are obligated to consider a customer’s risk-tolerance when making suitable investment recommendations. Additionally, they are required to carefully examine the investment’s risks and avoid misrepresenting material facts. Brokerage firms must diversify their clients’ portfolios and cannot overconcentrate the customer’s accounts in any one investment product or market sector.
If you suffered investment losses in excess of $100,000 in Griffin-American Healthcare REIT and/or any other illiquid alternative investments including REITs and BDCs, due to your brokerage firm or financial advisor, contact attorney Lawrence L. Klayman at (888) 997-9956 or lawrence@klaymantoskes.com for a free and confidential consultation to discuss recovery options. We do not collect attorney’s fees unless we are able to obtain a financial recovery for you.
KlaymanToskes is a leading national securities law firm which practices exclusively in the field of securities arbitration on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm has recovered over $250 million in FINRA arbitrations and over $350 million in other securities litigation matters. KlaymanToskes has office locations in California, Florida, New York, and Puerto Rico.
KlaymanToskes, P.A.
Lawrence L. Klayman, Esq.
888-997-9956
lawrence@klaymantoskes.com
www.klaymantoskes.com