Did you lose money investing in Cole Office & Industrial REIT (CCIT II)?
Galvin Legal, PLLC is launching an investigation on behalf of investors who may have suffered losses investing in Cole Office & Industrial REIT (CCIT II), a publicly registered non-traded real estate investment trust, at the recommendation of their financial advisor. If you suffered losses investing in the investment, then Galvin Legal, PLLC may be able to help you recover your losses in a Financial Industry Regulatory Authority (“FINRA“) arbitration claim against the broker-dealer and/or registered representative that recommended the investment.
Cole Office and Industrial REIT (CCIT II) commenced operations in September 2013 and invests primarily in single-tenant necessity office and industrial properties that are leased to tenants under long-term, net leases. The company closed its primary offering in September 2016 after raising $672 million in investor equity. Cole Office and Industrial REIT is operated by CCO Group LLC, a subsidiary of CIM Group, a real estate and infrastructure owner, operator and lender.
UPDATE 6/4/2020: The board of Cole Office & Industrial REIT (CCIT II) has approved an estimated per share net asset value of $9.92 for the company’s Class A and Class T shares of common stock as of March 31, 2020. Shares were originally sold for $10.00 each. The valuation was based on the estimated market value of the REIT’s assets less the estimated market value of its liabilities, divided by the total number of shares outstanding. The REIT’s last reported NAV per share was $10.06 as of December 31, 2019. Previously, the company declared an NAV per share of $11.03 as of December 31, 2018, and after paying a $1.03 per share special cash distribution in December 2019, the valuation was reduced to $10.00. Class A and Class T shares now issued through the distribution reinvestment plan will be priced at $9.92 per share, and the new valuation will serve as the most recent NAV per share for its share redemption program.
UPDATE 5/12/2020: MacKenzie Realty Capital, a publicly registered non-traded business development company, has launched an unsolicited tender offer to purchase up to one million shares of Cole Office & Industrial REIT (CCIT II) for $4.50 per Class A and Class T share. The tender offer expires on June 18, 2020. Cole Office & Industrial REIT (CCIT II) recently declared a net asset value per share of $10.06 for its Class A and Class T shares of common stock, as of December 31, 2019.
What are Real Estate Investment Trusts (REIT)?
A Real Estate Investment Trust (“REIT”) is a complex investment that is generally only suitable for sophisticated high-net worth investors, and then only in certain circumstances. A REIT is an entity that owns, and may also manage, income producing real estate. REITs pool capital from multiple investors and use it to purchase properties, similar to mutual funds and other pooled investment vehicles.
A Real Estate Investment Trust can be offered in several different forms. A Public Exchange Listed REIT is registered with the U.S. Securities and Exchange Commission (“SEC”) and is publicly traded on a national securities exchange. A Public Non-Listed REIT is registered with the SEC, but does not trade on a major securities exchange. Finally, a Private REIT, also known as a private-placement REIT, is not registered with the SEC and does not trade on a national securities exchange.
Cole Office & Industrial REIT (CCIT II) Due Diligence Requirement
FINRA requires brokerage firms to conduct due diligence on investments, such as Cole Office & Industrial REIT (CCIT II), and to conduct a suitability analysis when recommending securities to a customer that takes into account the customer’s knowledge and experience. FINRA Rule 2111(a) states that “a member or an associated person must have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on the information obtained through the reasonable diligence of the member or associated person to ascertain the customer’s investment profile. A customer’s investment profile includes, but is not limited to, the customer’s age, other investments, financial situation and needs, tax status, investment objectives, investment experience, investment time horizon, liquidity needs, risk tolerance, and any other information the customer may disclose to the member or associated person in connection with such recommendation.”
Rule 2111 is composed of three main obligations: reasonable-basis suitability, customer-specific suitability, and quantitative suitability. Brokerage firms that fail to conduct adequate due diligence on investments they recommend, such as Cole Office & Industrial REIT (CCIT II), or that make unsuitable recommendations can be held responsible for the customer’s losses in a FINRA arbitration claim.
Request a Free Consultation with a Securities Attorney
This information is all publicly available and is being provided to you by Galvin Legal, PLLC.
Galvin Legal, PLLC is a national securities arbitration, securities mediation, securities litigation, securities fraud, securities regulation and compliance, and investor protection law practice. For more information on Galvin Legal, PLLC and its representation of investors, please visit www.galvinlegal.com or call 1-800-405-5117.