The White Law Group continues to investigate potential securities claims involving broker dealers who may have improperly recommended New York City REIT, formerly known as ARC New York City REIT, to investors.
New York City REIT, Inc., formerly known as ARC New York City REIT, is a non-traded real estate investment trust that owns a portfolio of high-quality commercial real estate located within the five boroughs of New York City, particularly Manhattan, according to its website.
On August 18, New York City REIT listed its class A common stock on the New York Stock Exchange under the symbol “NYC.”
The class A shares represented 25% of NYC’s outstanding common stock. Every 120 days after the listing, an additional 25% of NYC’s stock represented by class B common stock will convert into class A common stock, concluding with all shares listed and freely tradeable within 360 days.
According to filings with the SEC, the board reportedly approved a 2.43-1 reverse stock split that would cause the total number of shares to decrease 2.43 times as compared to the total number of shares outstanding, which was roughly 31 million as of June 30th.
The board also noted that they will be reinstating distributions which will be paid as dividends in arrears on a quarterly basis to holders of record on a single quarterly record date, “with the first dividend paid in October 2020 in a partial quarterly amount covering the period from the date on which shares commence trading on the NYSE through September 30, 2020.”
Although the REIT’s current NAV per share is $20.26/share as of June 30, 2019, investors may have reason for concern due to declining secondary market prices.
On December 9, 2019, Mackenzie Realty Capital, Inc. extended an offer to purchase shares of New York City REIT, Inc. at a purchase price of just $10.05/Share. The initial offering price of New York City REIT was $25.00/share.
Prior to making recommendations to an individual investor, brokerage firms are required by the Financial Industry Regulatory Authority (FINRA) to disclose all the risks of an investment. Recommendations should only be made if the investment is suitable for an individual investor given their age, investment objections, investment experience and risk tolerance.
Brokerage firms that do not perform adequate due diligence on an investment and/or make unsuitable recommendations can be held accountable for investment losses through FINRA arbitration.
High commissions could be a motivating factor for unscrupulous financial advisors to sell non-traded REITs regardless of whether the investment is in line with the client’s investment objectives and profile. Moreover, the total commissions and expenses make it difficult for the REIT to perform in line with the market.
Filing a Complaint against your Brokerage Firm
If you are concerned about your investment in New York City REIT, you may be able to file a complaint against your brokerage firm. Please call the securities attorneys of The White Law Group at 888-637-5510 for a free consultation.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Franklin, Tennessee.
For more information on The White Law Group, visit https://www.whitesecuritieslaw.com.