NorthStar Healthcare Income REIT, has suffered tremendous losses since it launched in 2013. This reit has stopped paying dividends and is challenging to buy and sell. The reit has also been the subject of intense scrutiny by FINRA.
Many investors that were sold NorthStar Healthcare Income REIT are now filing claims against their financial advisors. The law firm Haselkorn & Thibaut is representing investors to recover what may be huge losses. Investors can call 1 888-628-5590 for a free consultation.
Investing in healthcare income REITs is risky, and investors should be aware of the risks and potential downsides before purchasing shares. Investors must also ensure that their broker firms provide full transparency in their dealings.
In this case, Northstar Healthcare was criticized for not being transparent enough about its dividends and distributions. However, it is hard to blame the company for paying high commissions to brokers recommending its shares. Besides, these brokers and financial advisers probably knew all of the risks of this type of investment.
The company’s portfolio includes a variety of healthcare real estate investments. It was formed in February 2013 and began acquiring healthcare real estate investments. December 31, 2018, the portfolio was valued at $3.5 billion. However, management and the board of directors decided not to pay dividends in 2019.
NorthStar Healthcare Income was once one of the market’s most popular healthcare income REITs, and investors were encouraged to buy it because of the good distributions. However, investors should note that this REIT is not a bond fund, and investors should be wary of high commissions.
It has suffered devastating losses of principal since it launched in 2013
The NorthStar Healthcare Income REIT launched in February 2013 and raised $2 billion. Its portfolio currently amounts to $3.5 billion and includes 642 properties. However, the company has been experiencing devastating principal losses since its launch. The company has been forced to suspend its income distributions and sell off some properties. This decision will result in significant losses for some investors, as their monthly distributions will be discontinued and they could lose their entire principal.
The company is a publicly registered, non-traded REIT sponsored by Colony Capital, a real estate investment company with $43 billion in assets under management. Its management team is led by Robert Gatenio, who serves as executive chairman. Other executive officers include Douglas W. Bath, CFO Frank V. Saracino, and Ann B. Harrington, general counsel. As of March 31, 2018, Northstar Healthcare had $3.5 billion under management.
Investors are urged to use caution when investing in non-traded REITs. These funds are risky and are not suitable for every investor. Brokers and financial advisors have a legal duty to recommend appropriate investments, and they are also required to supervise their sales practices and dealings with clients. If these obligations are breached, investors may be entitled to recover their losses.
Northstar Sold Properties
The healthcare industry has experienced a number of recent acquisitions and sales. NorthStar Healthcare Income Inc. recently completed a deal to acquire Trilogy Health Services LLC. The acquisition includes the acquisition of the operating company of Trilogy and a stake in the remaining 15 facilities. The transaction will create a joint venture between NorthStar and Griffin-American, with the former owning 70% of the new company while the latter will have a 30% ownership stake. In addition, Trilogy’s leadership will retain a 4% equity stake.
In February 2013, NorthStar Healthcare Income raised $1.7 billion through an initial public offering. It completed a follow-up offering in January 2016, raising an additional $232.6 million. It then sold fourteen communities to Welltower Inc. for $580 million in December 2021, bringing its portfolio to over $5 billion as of the third quarter of 2021. In the months since the company has reduced its payout rates and suspended its buyback program.
NorthStar Healthcare raised over $2 billion in equity funding between 2013 and 2018. However, despite this substantial amount of cash, the company failed to maximize shareholder returns. As a result, NorthStar Healthcare’s losses increased to more than $1 billion, causing the company to suspend its client dividend payments. In addition, the company is currently facing several legal issues.
Dividend Rates Stopped
Northstar Healthcare Income REIT shareholders have experienced a drop in their share values over the last year. This has resulted in a loss of a significant portion of their principal. This is particularly concerning since investors expected to receive a higher rate of dividends. Furthermore, the company continues to face legal problems.
Investors should consider the company’s distribution rates and net asset value to make a sound investment decision. The company is a healthcare REIT and focuses on healthcare-related real estate, including retirement homes and rehab clinics. Although it focuses on senior housing, it invests in other healthcare properties, including hospitals and rehab clinics.
Northstar Healthcare Income REIT is not suitable for all investors. Some investors suffered significant losses, making it very difficult to purchase or sell.
It is not a retail investment, and many investors were misguided in investing. Financial advisors also failed to perform adequate due diligence on the company, and many investors were sold the asset with high commissions without any evidence of its potential for profit.