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Steadfast Apartment REIT Investment Loss Options

Posted on Monday, April 12th, 2021 at 6:54 pm    

Steadfast Apartment Real Estate Investment Trust

Did you lose money investing in Steadfast Apartment Real Estate Investment Trust (REIT)? Erez Law is currently investigating brokers at brokerage firms across the country who recommended their clients invest in Steadfast Apartment REIT, Inc., a publicly-traded, non-traded REIT that invests in apartment communities across the United States.

As of March 2021, “the Company’s board of directors, on the recommendation of the Company’s Valuation Committee, determined a new estimated value per share of $15.55 as of December 31, 2020. The new estimated value per share represents a $0.32 increase from the $15.23 value as of March 6, 2020. The estimated value per share as of December 31, 2020, was determined by the Company’s board of directors after reviewing property-level and aggregate valuation analyses conducted by independent, third-party firms,” according to a company announcement

As of February 2021, Steadfast Apartment REIT, Inc. limited its share repurchases and lowered its distribution rate. According to public records, Steadfast Apartment REIT Inc. cut its distribution rate from $.90 per share to $.53 per share, a nearly 50% reduction.

As of the end of September 2020, the Steadfast Apartment REIT, Inc.’s portfolio consisted of 72 properties (including three properties held for the development of apartment homes) in 14 states, according to a company announcement

As of March 2020, Steadfast Apartment REIT, Inc. was reported to be valued at $15.23 per share. However, public records indicate that Steadfast Apartment REIT, Inc. traded on the secondary market for far less, ranging from $10 to $11 per share. 

According to a company announcement, in March 2020, Steadfast Apartment REIT, Inc. merged with Steadfast Income REIT, Inc. and Steadfast Apartment REIT III, Inc., acquiring 36 multifamily properties with 10,166 apartment homes and a 10% interest in one unconsolidated joint venture that owned 20 multifamily properties with a total of 4,584 apartment homes, all of which had a gross real estate value of approximately $1.5 billion.

A REIT is a company, modeled after mutual funds, that owns or finances income-producing real estate and provides investors of all types of regular income streams, diversification, and long-term capital appreciation. Unlike other real estate investments, non-traded REITs are often entirely illiquid. Non-traded REITs hold additional risks for investors because they often feature limited redemption programs, high fees and commissions (on average 13.2 percent), and internal conflicts of interest. Unlike stocks on the New York Stock Exchange (NYSE), non-traded REITs are not publicly traded and cannot be sold through an exchange, only through secondary market auctions. 

Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, brokerage firms across the country may be liable for investment or other losses suffered by its customers.

Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.