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Healthcare Trust: Non-Traded REIT Investment Had “High Degree of Risk”
Healthcare Trust Inc., also known as HTI, is a multi-billion dollar real estate investment trust (REIT). Publicly registered but non-traded, Healthcare Trust has declined from its original value of $25/share. Investors who have suffered loses in their Healthcare Trust investments may be entitled to damages, especially if their financial advisors represented the REIT as a safe, conservative and/or liquid investment.
What Is Healthcare Trust Inc.?
Healthcare Trust is a real estate investment trust, an investment entity that uses investors’ funds to purchase and operate real estate properties. It is publicly registered but non-traded. According to its website, the REIT holds $2.6 billion in real estate assets, with its portfolio focused on medical office buildings and senior living properties. A March 2022 press release said that Healthcare Trust currently owns “54 serviced enriched senior living communities,” with more under its operation. According to an April 2022 report by The DI Wire, the company owned properties in 33 states, encompassing more than $9 million rentable square feet, as of the end of 2021. Its primary offering began in the beginning of 2013 and concluded in late 2014, having raised more than $2 billion in investor funds.
Was Healthcare Trust Inc. a Risky Investment?
A 2015 presentation featured on Healthcare Trust’s website warns potential investors that investments in non-traded REIT’s common stock are highly risky. “You should purchase these securities only if you can afford a complete loss of your investment,” the presentation states. A section of the website titled “Risk Factors” describes a few risks associated with the investment:
-“No public market currently exists, or may ever exist, for shares of our common stock and our shares are, and may continue to be, illiquid.”
-“Our operating results are affected by economic and regulatory changes that have an adverse impact on the real estate market in general.”
-“Our property portfolio has a high concentration of properties located in Florida. Our properties may be adversely affected by economic cycles and risks inherent to those states.”
-“Our Credit Facility restricts our ability to use cash that would otherwise be available to us, and there can be no assurance our available liquidity will be sufficient to meet our capital needs.”
-“We focus on acquiring and owning a diversified portfolio of healthcare-related assets located in the United States and are subject to risks inherent in concentrating investments in the healthcare industry.”
The “Risk Factors” section of Healthcare Trust’s website states further that “all” of the non-traded REIT’s executive officers have conflicts of interest; that it may “fail to continue to qualify as a REIT”; that it is subject to risks associated with the ongoing Covid-19 pandemic, including declining occupancy in its senior housing properties; and that because it depends on its tenants for rental revenue, its rental revenue depends upon “the success and economic viability of our tenants.”
Taken together, these factors make Healthcare Trust a highly risky investment for many retail investors, especially inexperienced investors and senior citizens with conservative portfolios and high liquidity needs. Financial advisors who did not fully and accurately disclose these risks to their customers may be liable for misrepresentation and recommending unsuitable investments.
Has Healthcare Trust’s Value Fallen?
Shares in Healthcare Trust “were originally priced at $25.00 each,” according to a recent report by The DI Wire. That figure has since declined. As of December 31, 2018, the REIT’s NAV was $17.50/share, per The DI Wire; one year later, the company’s board approved a NAV of $15.75/share. In April 2022, the company reportedly declared that its NAV was $15.00/share as of December 31, 2021. An article in The DI Wire observed that a third-party firm provided Healthcare Trust with an NAV range of $13.78/share to $15.50/share, “with a midpoint of $14.61 per share – which is $0.39 lower than the declared NAV per share.”
Healthcare Trust Losses? Call Carlson Law for Free
Carlson Law represents investors involved in claims against financial advisors and investment firms throughout the United States. If your investment advisor did not fully disclose the risks associated with an investment in Healthcare Trust REIT—such as the potential for an entire loss of principal—please call us at 888-976-6111 or complete our contact form for a free and confidential consultation.