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Our law firm is handling claims on behalf of investors who invested in KBS REIT I and KBS REIT II. As of March 31, 2012, the offering share price of KBS REIT I had declined to $5.16, representing a decline of about 50% from the intial offering price of $10.00. Further, KBS investors were advised that they would not be receiving distributions any longer.
KBS REITs are non-traded, illiquid investments, and accordingly they are not suitable for all investors. Under Rules established by the Financial Industry Regulatory Authority (“FINRA”), brokerage firms have an obligation to make only suitable recommendations and to fully disclose all risks associated with a recommended product, including the fact that REITs are illiquid products. Moreover, brokerage firms have a duty to conduct a reasonable investigation of the issuer and the securities they recommend before approving them for sale to their customers.
In October of 2011, FINRA issued a new Investor Alert called Public Non-Traded REITs-Perform a Careful Review Before Investing to help investors understand the benefits, risks, features and fees of these investments. While investors may find non-traded REITs appealing due to the potential opportunity for capital appreciation and the allure of a robust distribution, investors should also realize that the periodic distributions that help make non-traded REITs so appealing can, in some cases, be heavily subsidized by borrowed funds and include a return of investor principal. Additionally, early redemption of shares is often very limited, and fees associated with the sale of these products can be high and erode total return.
Investors who purchased KBS REIT I or KBS REIT II can contact our firm to explore their legal rights and options. You may be eligible to file a claim or lawsuit agaist the brokerage firm who sold you this investment, in order to recover some of your losses.