REIT investors are in for a bumpy road. As speculation grows that the Federal Reserve may raise interest rates, real estate investment trust (REITs) have dropped in value, suffering their biggest drop since September 2014. Rising interest rates would make it more expensive for REITs to borrow money, which, in turn, would hurt their ability to buy property and develop real estate. Many REIT investors will suffer investment losses that they cannot afford, including those who bought their REITs through a private placement. Over the years we have seen numerous occasions where stockbrokers sold high-commission, private-placement REITs to investors who could not afford the risk. We have represented a number of investors in FINRA arbitration claims to recover investment losses that resulted from unsuitable private placement investments.
In addition to the direct result on REITs,higher interest rates also would mean higher yields on U.S. Treasury bonds, thereby making REITs less attractive to investors. And that lower demand for REITs could further decrease the value of investors’ REIT investments.
If you lost money in a private placement REIT sold to you by a broker through LPL Financial, Ameriprise, or any other brokerage firm, contact our FINRA arbitration lawyers for a free investment loss consultation. We represent investors throughout the United States, with offices in Miami, Los Angeles, New York, and West Palm Beach.