Investigation: Inland American Real Estate Trust (InvenTrust Properties Corp.)

Fitapelli Kurta is investigating customer complaints on behalf of customers who purchased Inland American Real Estate Trust, Inc., which is now known as InvenTrust Properties Corp. Inland American Real Estate Trust, Inc., now known as InvenTrust Properties Corp., is a non-traded real estate investment trust, or REIT, that owns and manages real estate. According to the prospectus for Inland American Real Estate Trust, Inc., an investment in the REIT involve a high degree of risk. As such, the products are not suitable for many retail investors.

Non-traded REITs are types of REITs that are not traded on a stock exchange. While the brokers that sell non-traded REITs may argue that this is a positive because InvenTrust Properties Corp. is not subject to market fluctuations, in reality it is negative. This is true because non-traded REITs have little price transparency and are illiquid – they cannot be easily sold like traded REITs. In addition, non-traded REITs, such as Inland American Real Estate Trust, have upfront sales changes, which immediately reduce the amount available for investment and the overall return.

FINRA, or the Financial Industry Regulatory Authority, regulates broker dealers who market and sell non-traded REITs such as Inland American Real Estate Trust (InvenTrust Properties Corp.). Under FINRA rules, broker-dealers much ensure that all investments are suitable for customers before recommending them. Non-traded REITS, such as Inland American Real Estate Trust (InvenTrust Properties Corp.), may not be suitable for the following types of investors:

  • Investors who are over the age of 65.
  • Investors who have annual incomes of less than $200,000.
  • Investors who have a “low” or “moderate” risk tolerance.
  • Investors who have short term cash needs (i.e. they need the ability to access cash in the event of emergencies).
  • Investors who have a high concentration of their portfolio in alternative investments, or non-traded REITs.

In May 2012, Inland America, announced that it was the subject of a Securities and Exchange Commission investigation for alleged violations of federal securities laws regarding its fees and administration. In March, 2015, it was announced that Inland America received a clean bill of health from the SEC. Nevertheless, the investigation and the facts and circumstances surrounding it should be concerning to investors as an SEC investigation, regardless of the outcome, is never a good sign.

In April 2015, Inland American Real Estate Trust announced that it was changing its name to InvenTrust Properties Corp. The firm hopes that the name change to InvenTrust Properties Corp. will enable it to put its former SEC investigation into the past and move forward. Regardless of the name, Inland American Real Estate Trust or InvenTrust Properties Corp. still contains the same risks and it may not be suitable for most investors.

If you or someone you know invested in Inland American Real Estate Trust, now known as InvenTrust Properties Corp., and you lost money please contact us today for a free consultation. The law may limit the time you have to seek recovery so it is important that you act immediately.