Real Estate Investment Trusts (REITs)

A real estate investment trust (REIT) is a security that invests in real estate directly either through properties or mortgages. Generally, REITs can be publicly or privately held. Publicly held REITs can be sold on an exchange and publicly traded. Non-traded REITs are sold through broker-dealers and are private. REITs are generally classified as equity, mortgage, or hybrid.

Equity REITs invest in and own property. The revenue for equity REITs come principally from the rent roll from the properties they own. Mortgage REITs invest and own property mortgages. Mortgage REITs loan money for mortgages to real estate owners, purchase existing mortgages, or mortgage-backed securities (MBS). The revenues for Mortgage REITs are earned through the interest that they earn on mortgage loans. Hybrid REITs combine investment strategies from equity REITs and mortgage REITs and invest in property and mortgages.

REITs are generally valued and examined using the net asset value (NAV), funds from operations (FFO), and adjusted funds from operations (AFFO).

Increased volatility in stock markets has led many investors to look for investment products that are more stable. Some non-traded REITs have claimed to offer stable returns in the volatile real estate market. As the Financial Industry Regulatory Authority (FINRA) and the Securities Exchange Commission (SEC) have recently noted, these products may not be as safe and stabile as advertised. As the SEC noted, a common sales tactic of broker-dealers that sell non-traded REITs is to claim they are able to eliminate volatility. However, the problem is that the REIT determines the value of its assets and therefore investors may simply not know about the volatility.

The attorneys at Gana LLP have extensive experience arbitrating REIT cases. If you invested in a REIT and need an attorney to evaluate your investment and determine if it was appropriately recommended, contact us.

Securities Lawyers Blog - REITs
Client Reviews
★★★★★
"I will never forget how much you helped me by winning my case! I never thought I would see any money from my investment. I admire the way you fight for everyday people against big companies. Thank you so much!"
★★★★★
"Adam is an outstanding lawyer. I have worked on several cases with Adam and look forward to working with him again in the future." Rob D. - Co-Counsel.
★★★★★
"If you want an attorney that is easy to talk to and genuinely cares about your legal situation, contact Adam Gana. He helped me settle a difficult contract dispute. When you work with Adam, he makes you feel as if you are his top priority. He will call you regularly to stay on top of the situation and submits all necessary legal documentation in a timely manner. His writing is excellent, his demeanor professional, and his work exceptional." Nancy N.
★★★★★
Adam helped me recover money from my broker when I thought all was lost. My house was about to be foreclosed, and I lost everything. Adam came in and saved my life. Jean C.
★★★★★
Gana LLP has the best attorneys period. They work hard, they work fast and I would recommend them to anyone. They are like family. Liz N.