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What are Real Estate Investment Trusts (REITs)?

Real Estate Investment Trusts, also known by their acronym REITs, can include both traded REITs and non-traded REITs. Generally speaking, REITs work by pooling the resources of numerous smaller investors into one large fund which a manager then invests in various real estate holdings. Investors buy in when they purchase shares of the REIT.

Industry watchdog organizations including FINRA and the SEC are leading increased scrutiny into the way non-traded REITs are marketed to the public.

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Traded REIT and Non-Traded REIT Differences

Here are some of the differences between Traded REITs and Non Traded REITs:

  Traded REITs Non-Traded REITs
Primary Differences Traded on stock exchanges, unlike non-traded REITs. Not traded on public stock exchanges and generally may only be bought through private offerings, unlike traded REITs.
Liquidity Traded on stock exchange, generally easy to sell. Typically, a limited number of shares are redeemable but with a number of restrictions. Can be difficult to sell.
Up-Front Fees Underwriting fees may be 7% or more, can be subject to brokerage fees when bought on the open market. Fees may be as much as 15% of the price per share.
Valuation Share valuation is determined by market value. Valuation is determined by the fund managers or a third party.

Non-Traded REITs Lawsuits & Investigations

Following complaints from investors, FINRA and the SEC have increased scrutiny into a number of brokerage and investment firms who market and manage non-traded REITs. Investors have complained that they were sold non traded REITs as low-risk, high yield investments, which may be inaccurate. Furthermore, a number of these investors report that they are unable to redeem their shares and feel stuck in an uncertain investment.

In response to these reports, Girard Gibbs' securities fraud lawyers have filed a class action lawsuit against David Lerner Associates, Inc. and Apple REITs alleging violations in connection with the sale of these investments.

In addition, we are also currently investigating similar allegations against Behringer Harvard REITs.

>>More about Non-Traded REIT Lawsuits

Confused About Non Traded REITs?

If you or someone you know is confused about the value of a non-traded REIT or how redeem shares, please contact us. Free and confidential consultations are available with one of our securities attorneys by calling toll-free (866) 981-4800 or filling out the form to the right.

Securities Fraud Attorneys
  • Daniel
    Girard
    Daniel Girard is the founding partner of Girard Gibbs and has dedicated his career to enforcing the rights of... MORE >
  • John
    Kehoe
    John A. Kehoe is a partner in our New York office specializing in the prosecution of securities and financial... MORE >
  • Amanda
    Steiner
    Amanda Steiner is a partner with Girard Gibbs specializing in complex securities litigation. She has... MORE >
  • Dena
    Sharp
    Dena Sharp is a partner in Girard Gibbs' Securities Law Practice Group. MORE >
  • Lesley
    Tepper
    Lesley Vittetoe Tepper has focused her career on representing investors in securities and investment fraud... MORE >
  • Ashley
    Tveit
    Ashley Tveit is an associate with the firm specializing in protecting the rights of investors through... MORE >
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