REIT Managed by AR Global Sees Steep Decline in Value
From the Desk of Jim Eccleston at Eccleston Law LLC:
New York City REIT Inc. (the “NYC REIT”) has seen a sharp decline in share price over the last couple of months. The NYC REIT, which was started in 2013, had an offering price of $25 when it was first listed on the Nasdaq in August. As of last week, the shares were trading around $12. Prior to being listed on the Nasdaq, the NYC REIT also had a 2.43-to-1 reverse split.
According to an article in InvestmentNews, advisors who sold the REIT usually received a 7% commission, and the firms also received a commission of typically 1-2%. The NYC REIT was sold by dozens of independent broker-dealers, according to InvestmentNews.
The NYC REIT is managed by AR Global, and is one of a number of REITS offered by AR Global, formerly known as AR Capital. In 2019, AR Global, along with its controlling partner Nicholas Schorsch, agreed to pay $60 million in penalties to settle charges brought by the SEC. The SEC alleged that the firm, Schorsch, and another partner inflated fees and other charges related to REIT mergers in order to wrongfully obtain millions of dollars.
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Tags: eccleston, eccleston law offices, REIT, AR Global