As a former financial advisor who now works with the law firm Haselkorn & Thibaut, InvestmentFraudLawyers.com, I have a unique perspective on the challenges investors face in Peakstone Realty Trust, formerly Griffin Realty Trust. As a financial advisor, I witnessed firsthand how the REIT was often misrepresented to clients as a conservative, low-risk investment option with the potential for steady returns and easy liquidity, despite the company’s ability to strategically manage and adapt to fluctuating market conditions.
Peakstone Realty Trust is an internally managed, publicly registered real estate investment trust (REIT). Its primary focus is owning and operating a portfolio comprised mainly of single-tenant industrial and office properties.
In March 2023, the entity rebranded, shifting its name from Griffin Realty Trust to Peakstone Realty Trust. This change was part of its strategy to prepare for a New York Stock Exchange (NYSE) listing. On April 13, 2023, Peakstone Realty Trust achieved this goal, successfully listing its shares on the NYSE with the ticker symbol “PKST.”
Previously, the company had encountered several challenges as Griffin Realty Trust**.** Notably, it faced numerous complaints from investors. These investors claimed that their financial advisors and broker-dealers had misrepresented the REIT as a conservative, short-term, and liquid investment option. Unfortunately, this led to significant losses for many investors who had put their money into Griffin Realty.
For those who have incurred investment losses with Peakstone Realty Trust, Haselkorn & Thibaut, InvestmentFraudLawyers.com offers a helping hand. This law firm is dedicated to defending investors across the United States and boasts a remarkable 98% success rate. With over 50 years of experience and offices in Florida, New York, North Carolina, Arizona, and Texas, the firm has a track record of recovering millions for investors.
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This article explores the history and challenges faced by Griffin Realty Trust and Peakstone Realty Trust. It also offers insights into the nature of the complaints lodged against them and discusses viable options for investors seeking to recover their losses.
Background on Peakstone Realty Trust (NYSE: PKST), Griffin Realty Trust, Cole Office & Industrial REIT
Table of Contents
Peakstone Realty Trust (NYSE: PKST) is an internally managed**, industrial, and office real estate investment trust (REIT) that is listed on the New York Stock Exchange. The exchange-listed information can be found in its Quarterly Reports on Form 10-Q filed with the U.S. Securities and Exchange Commission. It was formerly known as Cole Office & Industrial REIT (CCIT II), Inc. Griffin Realty Trust, formerly known as Griffin Capital Essential Asset REIT, is a complex and risky investment product that may not be suitable for inexperienced retail investors**. As part of its strategic expansion, Griffin Realty Trust has engaged in significant acquisition activities, including the purchase of a large industrial outdoor storage portfolio, to enhance its growth profile and align with market demands. In recent times, Griffin Realty Trust has suspended its share redemption program and its distribution reinvestment plan. These events have led to investor dissatisfaction and a growing number of complaints.
The decline in Net Asset Value
In 2022, Griffin Realty Trust Inc reported a decline in its net asset value (NAV) per share from $9.10 to $7.37, an 18% decrease. The company attributed this decline to the decrease in the value of office properties. This decline also impacted the cash flows, reflecting the financial stability and operational performance of the REIT.
Q1 2023 Highlights
- Revenue stood at approximately $67.0 million.
- The Company reported a net income of about $9.0 million; the net income attributable to common shareholders was approximately $6.0 million, or $0.17 per share, both basic and diluted.
- The basic and diluted per share/unit Funds from Operations (“FFO”) 1 stood at $0.37.
- Adjusted Funds from Operation (“AFFO”)1 were $0.68 per share/unit, both basic and diluted.
- Same Store Cash Net Operating Income (“Same Store Cash NOI”) reached approximately $48.4 million.
- The Company completed the disposition of three properties for a total of $169.6 million, aligning with its strategic asset management goals.
- Peakstone amended its existing corporate credit facility (the “Facility”) to add an extra extension option to the revolving credit facility (the “Revolver”) through January 2026.
- The Company repaid the $400 million 2024 Facility term loan using capacity from the Revolver and cleared a $19.1 million secured loan.
- The Board of Trustees declared a dividend of $0.075 per common share for March 2023.
Subsequent Events
On April 10, 2023, the Company redeemed all preferred shares (comprising 5 million Series A Preferred Shares held by a third-party international investor). On April 13, 2023, Peakstone listed its common shares on the NYSE under the ticker “PKST”. A detailed document outlining the financial announcements and reporting related to this listing was made available to ensure transparency and clarity.
CEO Michael J. Escalante expressed satisfaction over the successful execution of their business plan, including the amendment of the revolving credit facility, the redemption of preferred shares, and the listing on the NYSE. He reaffirmed their commitment to achieve an investment-grade rating by improving their balance sheet.
Financial Results Summary
The Company’s total revenue for Q1 2023 was approximately $67.0 million, a decrease primarily due to the sale of 48 properties in 2022 and three properties in Q1 2023.
Net income attributable to common shareholders for Q1 2023 was approximately $6.0 million, primarily due to the net gain of $30.6 million from the sale of three properties in Q1 2023. The total debt-to-equity ratio and return on equity are crucial metrics that reflect the financial health and profitability of the company.
FFO and AFFO for Q1 2023 were $14.7 million and $26.8 million, respectively, primarily due to the decrease in rental income as a result of property dispositions.
Same Store Cash NOI was approximately $48.4 million, a decrease primarily due to a $2.2 million rent concession related to a lease renewal.
Operating Results Summary
The Company’s wholly-owned portfolio consisted of 78 properties in 24 states, 95.3% leased, with an average economic occupancy of 94.6%.
The Company completed sales of three properties for a total of $169.6 million.
The Company had $500.5 million in total liquidity and $1.5 billion in total consolidated debt. The Company has been focusing on reducing leverage as part of its broader strategy to shift its portfolio more towards industrial assets, which has been crucial for its operational improvements and financial stability.
Subsequent to quarter-end, the Company redeemed all preferred shares and completed a one-for-nine reverse share split.
Dividends Summary
- The Company paid an all-cash distribution for January and February 2023 and declared an all-cash monthly distribution for March.
Real Estate Portfolio
Peakstone Realty Trust’s real estate portfolio is a testament to its strategic focus on high-quality, predominantly single-tenant industrial and office properties. With a keen eye on operating industrial assets in strategic markets, the company has curated a portfolio designed to deliver stable income and long-term growth for its investors. The portfolio boasts a weighted average lease term of approximately 6.5 years, ensuring a steady stream of rental income. Valued at around $3.0 billion, Peakstone’s real estate portfolio reflects a robust financial condition, underpinned by a strong balance sheet. This diversified mix of industrial and office properties positions Peakstone Realty Trust as a formidable player in the real estate investment trust (REIT) sector, offering investors a reliable and lucrative investment opportunity.
Location and Operations
Headquartered in El Segundo, California, Peakstone Realty Trust operates a diverse portfolio of properties strategically located in high-growth, coastal, and sunbelt markets. These regions are known for their economic dynamism and robust demand for industrial and office space. The company’s properties are generally leased to creditworthy tenants under long-term net lease agreements, which often include contractual rent escalations. This leasing strategy not only ensures a stable income stream but also mitigates risk. As an internally managed REIT focused on owning and operating industrial assets, Peakstone Realty Trust has established a strong presence in the Western United States, positioning itself to capitalize on the growing demand for industrial and office properties in these strategic markets.
Investment Strategy
Peakstone Realty Trust’s investment strategy is meticulously crafted to acquire and manage high-quality industrial and office properties in strategic markets. The company targets properties that exhibit strong locations, are leased to creditworthy tenants, and have long-term lease agreements with contractual rent escalations. This approach ensures a stable source of income and long-term growth for investors. By adhering to these criteria, Peakstone Realty Trust aims to create a resilient and profitable real estate portfolio. The company’s disciplined investment strategy is guided by a commitment to long-term value creation, ensuring that investors benefit from both steady income and capital appreciation.
Board of Directors Refreshment
In March 2023, Peakstone Realty Trust announced significant changes to its board of directors in anticipation of the NYSE listing. Kevin A. Shields, Kathleen S. Briscoe, Ranjit M. Kripalani, James F. Risoleo, and J. Grayson Sanders each communicated their intention to resign.
Financial Advisor Complaints
Despite its inherent risks and complexities, investors have reported that their financial advisors recommended Griffin Realty Trust as a conservative, short-term, and liquid investment. Meaning investors that it would continue to pay income and not lose value. Currently, there is no Griffin Realty Trust redemption. The net asset value is now tied to the stock which is a substantial loss for many investors.
As a result, some investors have experienced significant losses, leading to increasing legal claims against negligent brokers and brokerage firms.
Risks and Problems with Non-traded REITS
Non-traded REITs pose various problems and risks for investors compared to publicly traded REITs. Some of these issues include:
- Lack of liquidity: Non-traded REITs are illiquid, meaning that they are not traded on a stock exchange and can be difficult to sell or redeem, which may be problematic for investors needing to access their funds quickly.
- Lack of share value transparency: Since non-traded REITs are not publicly traded, there is no market for their shares, making it challenging to determine their true value. Some non-traded REITs will reveal all assets and value after 18 months of their offering, but this may not be comforting for investors who prefer more frequent updates on their investments’ worth [2].
- Use of offering proceeds and borrowings to pay distributions: Non-traded REITs may use the money from investors and borrowings to pay distributions, reducing the value of the shares and the cash available for the REIT to purchase real estate assets.
- Fees and expenses: All REITs come with fees and expenses, which can impact the overall return on investment. Non-traded REITs may have higher fees than publicly traded ones due to their complex structures and limited marketability.
- Market risk: Non-traded REITs, like other investment vehicles, are subject to market risk, which can result from factors such as recessions, interest rate changes, and natural disasters. Market risk can impact the entire financial market and may be difficult to eliminate through diversification.
- Regulatory changes: The North American Securities Administrators Association is considering new rules limiting the amount an investor can buy into a non-traded REIT and prohibiting such funds from paying out distributions based on borrowed money or offering proceeds. These potential changes could affect the attractiveness and returns of non-traded REITs for investors.
In conclusion, investors should carefully consider the risks and problems associated with non-traded REITs before investing, including liquidity, transparency, distribution funding practices, fees, market risks, and potential regulatory changes.
Regulatory Compliance
As a publicly traded real estate investment trust (REIT), Peakstone Realty Trust adheres to stringent regulatory requirements and compliance obligations. The company regularly files periodic reports with the Securities and Exchange Commission (SEC), including its most recent annual report on Form 10-K. Additionally, Peakstone Realty Trust complies with the rules and regulations of the New York Stock Exchange (NYSE), where its shares are listed under the ticker symbol PKST. The management team and board of directors are dedicated to maintaining the highest standards of regulatory compliance and transparency, ensuring that the company operates within the legal framework and upholds the trust of its investors.
Investor Resources
Peakstone Realty Trust is committed to providing its investors with comprehensive resources and up-to-date information. Investors can access a wealth of information, including the latest news and events, financial reports, and corporate governance documents, through the company’s website at www.pkst.com. The website also offers detailed insights into the company’s portfolio, properties, and operations, as well as its investment strategy and objectives. For personalized assistance, investors can contact the investor relations department directly. Peakstone Realty Trust prioritizes transparency and timely communication, ensuring that investors have all the information they need to make informed decisions.
Investor Recovery Options
Investors who have suffered losses due to investing in Griffin Realty Trust may be able to recover their losses through legal means. One possible option is to file a Financial Industry Regulatory Authority (FINRA) Dispute Resolution Claim. A FINRA securities arbitration is a way investors can recover financial losses that are typically faster and less costly than traditional lawsuits.
If you’ve experienced investment losses with Peakstone Realty Trust, Haselkorn & Thibaut, InvestmentFraudLawyers.com, can help. Victims of national securities fraud often think losses are the result of the market.
Our law firm specializes in fighting for investors nationwide and has a 98% success rate. With over 50 years of experience and offices in Florida, New York, North Carolina, Arizona, and Texas, we have recovered millions for investors.
Call us now for a free consultation at 1-888-994-8066 or email us at [email protected]. Remember, no recovery, no fee.
In light of the growing number of complaints, the Griffin Realty Trust board has urged its stockholders to consult with their own financial, tax, and other advisors and/or brokers to consider their individual circumstances and the considerations set forth in the tender offer documentation.
Conclusion
Investors who have suffered losses from investing in Griffin Realty Trust should explore their legal options to recover their losses. Consulting with experienced law firms and filing a FINRA Dispute Resolution Claim may provide investors with a pathway to recovery. It is essential that investors consult with their financial advisors and consider their individual circumstances before making any decisions.
Peakstone Realty Trust FAQs
What does Peakstone Realty Trust do?
Peakstone Realty Trust is a publicly registered, internally managed real estate investment trust (REIT) that is listed on the NYSE under the ticker symbol PKST. The company was formerly known as Griffin Realty Trust.
Peakstone Realty Trust owns and operates a high-quality, newer-vintage portfolio of predominantly single-tenant industrial and office properties.
These properties are mainly net leased to creditworthy and nationally recognized tenants under long-term agreements, often with contractual rent escalations. In their own words, they describe themselves as “America’s Blue-Chip Landlord™️”.
What is the tender offer for Griffin REIT?
There is no longer a tender offer for Griffin REIT. Griffin Realty Trust, now known as Peakstone Realty Trust, has been the target of multiple unsolicited tender offers.
In September 2022, MacKenzie and its affiliates launched a tender offer to purchase up to 1 million shares of Griffin Realty Trust for $4.09 per share in cash. Around the same time, CMG Partners extended an unsolicited tender offer to purchase up to 500,000 Class E shares for $3.76 per share in cash.
How much is Griffin Realty Trust worth?
The current share price of Peakstone Realty Trust (NYSE: PKST) is $24.78. Prior to the public listing, it was a non-traded REIT.
What is the E symbol for Griffin Realty Trust?
The ticker symbol for Griffin Realty Trust Class E shares is “GCEA”. Please note that Griffin Realty Trust changed its name to Peakstone Realty Trust in March 2023. It’s important to note that the current ticker symbol “PKST” is under the new name, Peakstone Realty Trust.
