National investment loss lawyers KlaymanToskes is investigating brokerage firms and financial advisors who unsuitably recommended investments in Moody National REIT II to their customers. Investors who were recommended Moody National REIT II by their financial advisors may have suffered significant losses due to declining property values, suspended distributions, illiquidity, and the REIT’s decision to liquidate its assets.
If your financial advisor recommended an unsuitable Real Estate Investment Trust (“REIT”) investment based on your investment profile, or disregarded your risk-tolerance when making investment recommendations, you may be entitled to a financial recovery through FINRA arbitration.
If you suffered losses in Moody National REIT II, or any other investments due to unsuitable recommendations by your brokerage firm or financial advisor, contact securities attorneyLawrence L. Klayman to discuss your potential recovery options at (888) 997-9956 orinvestigations@klaymantoskes.com for a free and confidential consultation. We do not collect attorney’s fees unless we are able to obtain a financial recovery for you.
Shareholders of Moody National REIT II have voted to liquidate and dissolve the REIT, following years of financial distress that intensified after the COVID-19 pandemic. Fundraising and distributions were halted in 2020, and the REIT has since struggled with declining asset values, rising debt, and maturing loan obligations.
To wind down operations, Moody National REIT II is selling hotel properties and intends to use proceeds to repay debt and make distributions to shareholders, though investor recoveries remain uncertain.
According to public SEC filings, Moody National REIT II completed the sale of Homewood Suites Austin, located in Austin, Texas, for approximately $9.4 million. The property was reportedly purchased in 2015 for approximately $14.25 million, excluding acquisition costs.
Based on publicly reported figures, the sale reflects a significant decline from the original purchase price, even before accounting for transaction costs, debt payoff, or depreciation.
Moody National REIT II has sold or lost several hotel properties in recent months, many at prices below prior purchase values:
As of March 31, 2025, the REIT reported ownership interests in 11 hotel properties.
Moody National REIT II has reported a steady decline in net asset value (NAV):
In addition, as of early 2024, a substantial portion of the REIT’s debt was scheduled to mature within the following year. Company disclosures warned that the REIT may be unable to meet its obligations without selling assets or liquidating.
Moody National REIT II suspended distributions and its share redemption program in April 2020, and those programs remain inactive. The REIT has indicated that distributions would not resume unless operational cash flow was sufficient to cover expenses, mortgage obligations, and repayment of a reported $50 million loan from an affiliated entity.
For many investors, this has meant no income, no liquidity, and limited exit options.
Secondary market activity suggests significant investor losses:
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 alternative investment recommendations is the high sales commissions brokers typically earn for selling these investments, which can be as high as 15%. A representative that recommends investments for the purpose of being compensated through increased commissions, and enriches themselves rather than benefiting the client, is violating securities laws.
To recover investment losses, you do not go through the traditional court system with a lawsuit. The only remedy is through a FINRA arbitration, a specific process designed for these types of disputes. This process involves presenting your case to a panel set by the Financial Industry Regulatory Authority (FINRA), not a courtroom. This approach is streamlined and focused on investment disputes, making it a suitable and effective way for investors to seek compensation for losses caused by financial advisors or brokerage firms.
FINRA (the Financial Industry Regulatory Authority) is a self-regulatory organization that oversees brokers and brokerages. In the event of a dispute between an investor and their financial advisor, investors can choose to file a FINRA arbitration claim. FINRA is overseen by the Securities and Exchange Commission (“SEC”).
The arbitration process is designed to be much faster than the court system and allows both parties to present their case before a panel of arbitrators. The arbitrators will then decide how to resolve the dispute, including ordering the advisor to pay damages for any losses suffered by the investor.
If you suffered losses in Moody National REIT II or other investments, you are encouraged to contact attorney Lawrence L. Klayman, at 888-997-9956 or by email at investigations@klaymantoskes.com to discuss potential recovery options. We do not collect attorney’s fees unless we are able to obtain a financial recovery for you.
As an investor, there are signs that you should look out for if you believe you have a claim against your broker/advisor for unsuitable investment recommendations in Moody National REIT II. These signs could potentially indicate misconduct, negligence, or investment fraud. Investors are encouraged to contact our firm immediately if you have experienced any of the following:
Some investors have close relationships with their brokers due to the time and trust built over the course of their investment relationship. However, it is crucial to remember that financial decisions should be based on careful analysis and due diligence rather than solely relying on personal relationships.
Engaging the services of an experienced securities attorney to evaluate your specific circumstances is strongly advised. At KlaymanToskes, our team of experienced securities attorneys has a deep understanding of this complex area of law, allowing us to provide invaluable insight and tailored guidance that directly addresses your individual needs.
If you purchased unsuitable Moody National REIT II investments, or any other unsuitable investments through your financial advisor/brokerage firm, and suffered significant losses, contact KlaymanToskes at 888-997-9956 or fill out a short contact form for a free and confidential consultation. We do not collect attorney’s fees unless we are able to obtain a financial recovery for you.