Key Takeaway: Non-traded REITs are among the most commonly mis-sold investment products — carrying high commissions of 5–10%, no public market for resale, and valuations that are often inflated — and investors who were sold REITs without full disclosure of these risks may have FINRA arbitration claims.

REIT Fraud Lawyer — Recover Losses From Non-Traded and Alternative REITs

Your broker told you it was a safe, income-producing real estate investment. Steady dividends. No stock market volatility. A way to earn reliable income from commercial real estate without the ups and downs of the market. It sounded perfect — especially for someone approaching or in retirement.

But the reality of non-traded REITs is far different from the pitch. You can’t sell your shares when you need to. The dividends you were promised have been cut or eliminated. The value of your investment has declined — sometimes dramatically. And you’re only now learning about the fees, commissions, and conflicts of interest that were never fully disclosed.

If this sounds familiar, you’re far from alone. Non-traded REITs have destroyed billions in investor wealth, and the brokers who recommended them have frequently failed to disclose the risks that make these products unsuitable for most retail investors.

Haselkorn & Thibaut has over 50 years of experience recovering losses from REIT fraud and mis-selling. Our 98% success rate includes significant recoveries from brokerage firms that pushed non-traded REITs onto investors for whom they were completely inappropriate.

Call 1-888-885-7162 for a free consultation, or contact us online to speak with a REIT fraud lawyer.

What Is REIT Fraud?

REIT fraud occurs when a broker or financial advisor misrepresents, omits material facts about, or recommends an unsuitable real estate investment trust — most commonly a non-traded REIT — to an investor. The fraud may involve overstating the safety of the investment, failing to disclose illiquidity, concealing high fees, or recommending a REIT that is fundamentally inappropriate for the investor’s financial situation.

A Real Estate Investment Trust (REIT) is a company that owns, operates, or finances income-producing real estate. Publicly traded REITs are listed on stock exchanges and can be bought and sold like any stock. Non-traded REITs, by contrast, are not listed on any public exchange. They are sold directly to investors — often through broker-dealers — and have no public market for resale.

The pitch is appealing: steady income from real estate without stock market volatility. But the reality includes illiquidity, high fees, inflated valuations, and distributions that may be paid from capital rather than actual income — all risks that brokers frequently fail to disclose.

For a comprehensive guide on the risks of non-traded REITs, see: Non-Traded REITs: 10 Reasons They’re Riskier Than Your Broker Told You →

Signs You May Be a Victim of REIT Fraud

You can’t sell your REIT shares — Non-traded REITs have no public market. Redemption programs are limited, frequently suspended, and offer only a fraction of your investment value. You’re locked in for years — sometimes indefinitely.
Your REIT’s value has been written down significantly — Many non-traded REITs are initially valued at $10 or $25 per share, but subsequent revaluations have revealed the true value to be a fraction of that. Some REITs have lost 50–80% of their stated value. See our Non-Traded REIT Valuations 2026 Update →
Distributions have been cut or eliminated — The steady income you were promised has evaporated. Many non-traded REITs paid initial distributions from capital contributions rather than rental income — creating the illusion of income that wasn’t real.
You paid high upfront fees you didn’t know about — Non-traded REITs carry upfront selling commissions of 5–10%, plus dealer manager fees, acquisition fees, and organizational costs that can add another 5–10%. For every $100,000 you invested, $10,000–$20,000 may have gone to fees before a single dollar was invested in real estate.
Your broker didn’t explain the illiquidity — If your broker recommended a non-traded REIT without making clear that you might not be able to access your money for 7–10 years or longer, that omission may constitute fraud.
Your REIT was listed and you suffered immediate losses — Some non-traded REITs eventually list on a public exchange, and the listing price is often far below the price you paid. When InvenTrust listed at roughly $6.50 per share after being sold to investors at $10, investors suffered an immediate 35% loss.

Call 1-888-885-7162 for a free consultation, or contact us online — we can evaluate your REIT investment and determine whether you have a claim.

How We Build Your REIT Fraud Case

REIT analysis — We investigate the specific REIT you were sold, including its offering documents, financial statements, distribution history, and any regulatory actions against the sponsor or selling broker-dealer.
Suitability assessment — We compare the REIT’s risk profile — illiquidity, concentration, fee structure, and time horizon — against your investment profile. If you needed liquidity, had a moderate risk tolerance, or were approaching retirement, a non-traded REIT was likely unsuitable.
Disclosure failures — We document what your broker told you about the REIT and what they failed to disclose. If the broker emphasized income and safety while downplaying or omitting illiquidity, fees, and valuation risks, those omissions may constitute fraud.
Due diligence failures — Under FINRA rules, broker-dealers must conduct reasonable due diligence on the REITs they sell. We investigate whether the selling firm actually evaluated the REIT’s financial condition, real estate portfolio, and distribution sustainability — or simply sold it for the commission.
Damages calculation — We calculate your total losses, including the decline in your REIT’s value, any excess fees paid, the opportunity cost of your trapped capital, and tax consequences of the investment.

Major Non-Traded REIT Failures

InvenTrust (formerly InvenTrust Properties)

Originally sold at $10 per share, InvenTrust listed on the NYSE at approximately $6.50 — an immediate 35% loss for investors. Many investors who were told their investment was “safe” and “income-producing” suffered significant losses.

Griffin-American Healthcare REIT

This healthcare-focused non-traded REIT experienced significant valuation declines. Investors who were sold the REIT as a stable income investment discovered that the healthcare real estate market carried risks their broker never mentioned.

NorthStar Healthcare REIT

NorthStar Healthcare REIT has experienced severe valuation problems, with shares valued at a fraction of their original offering price. See our NorthStar Healthcare REIT Update →

Carter Validus Mission Critical REIT

Sold to investors as a stable income investment in mission-critical real estate, Carter Validus experienced distribution cuts and valuation declines that devastated investors who relied on the promised income.

American Finance Trust (AFIN)

American Finance Trust listed on NASDAQ at a price significantly below what investors paid, causing immediate losses for those who had been locked into the non-traded REIT for years.

What You Can Recover

Through FINRA arbitration, victims of REIT fraud and mis-selling may recover:

Net out-of-pocket losses — The difference between what you invested and what the REIT is currently worth (or what you recovered)
Excess fees — The excessive commissions, dealer manager fees, and organizational costs that reduced your investment from day one
Damages from misrepresentation — If your broker made false statements about the REIT’s safety, income, or liquidity
Interest — Compensation for the time your money was trapped in an unsuitable, illiquid investment
Attorneys’ fees — May be awarded by the arbitration panel
Punitive damages — In cases involving particularly egregious misrepresentation or concealment

REIT fraud claims have a strong track record in FINRA arbitration because the unsuitability is often clear: non-traded REITs are inherently illiquid and high-fee — characteristics that make them inappropriate for many of the investors to whom they are sold.

Why Choose Our Firm

Over 50 years of experience recovering losses from REIT fraud and mis-selling
98% success rate across all investment fraud cases
Free consultation — we evaluate your REIT investment at no cost
Contingency fee — you pay nothing unless we recover money for you
Nationwide representation — we handle cases in all 50 states
Former Wall Street defense lawyers — we understand how brokerages justify REIT recommendations
Active REIT investigations — we are currently pursuing claims involving multiple non-traded and alternative REITs

Call 1-888-885-7162 for a free consultation, or contact us online — we can tell you whether your REIT investment gives you a viable claim.

Related Practice Areas

FAQ

Are all non-traded REITs fraudulent? No. Not every non-traded REIT is fraudulent. Some are legitimate real estate investments that perform as expected. However, non-traded REITs are systematically mis-sold — brokers frequently fail to disclose the illiquidity, high fees, and valuation risks, and they recommend these products to investors for whom they are unsuitable. The mis-selling — not the REIT itself — constitutes the violation and grounds for recovery.

What if my REIT hasn’t lost value yet? Even if your REIT’s stated value hasn’t declined, you may still have a claim. Non-traded REIT valuations are often inflated and not independently verified. The true value may be significantly lower than what your statements show. Additionally, the illiquidity itself is a harm — if you need your money and can’t access it, that’s a real financial injury even if the stated share price hasn’t changed.

Can I recover losses from a publicly traded REIT? REIT fraud claims typically involve non-traded REITs, but publicly traded REITs can also be the subject of fraud claims — for example, if your broker concentrated your portfolio in a single REIT, misrepresented the REIT’s prospects, or recommended a REIT that was unsuitable for your financial profile. The claim would focus on the broker’s conduct, not the REIT’s performance.

How long do I have to file a REIT fraud claim? FINRA arbitration claims must generally be filed within 6 years of the events giving rise to the dispute. For REITs, this typically means six years from the date of purchase. However, if the fraud was concealed, the clock may start later. State statutes of limitations may impose shorter deadlines. Contact us promptly to protect your rights.

What if my broker no longer works at the firm that sold me the REIT? The brokerage firm that sold you the REIT is generally vicariously liable for the misconduct of its brokers, even after the broker leaves. Your claim is against the firm, not the individual broker. Brokerage firms carry errors and omissions insurance and have the financial resources to pay arbitration awards.

Can I sell my non-traded REIT shares? In most cases, there is no practical market for selling non-traded REIT shares. Some REITs offer limited redemption programs, but these are typically at a significant discount to the stated value and may be suspended at any time. Secondary market platforms like ShareStar or Central Trade exist but offer prices that are often 20–40% below the REIT’s stated value. The inability to sell is itself evidence of the illiquidity risk your broker should have disclosed.

This page is for informational purposes only and does not constitute legal advice. Past results do not guarantee future outcomes.