Chicago-based Stoltmann Law Offices continues to represent investors in claims to recover investment losses in connection with the COVID-19 pandemic. The carnage wrought by COVID-19 on brick and mortar stores and retail shops has taken down two REITs: The Pennsylvania Real Estate Investment Trust (PREIT) and the CBL & Associates Properties, Inc. (CBL) each filled for Chapter 11 Bankruptcy this week. Facing catastrophic losses in connection with retail tenants unable to pay rents, the REITs didn’t seem to believe they had many other options available. If you were an investor in CBL or PREIT, your shares are now worthless. If you were solicited to invest in CBL or PREIT by a financial or investment adviser, you could have a claim to pursue to recover your losses.
PREIT and CBL are publicly traded Real Estate Investment Trusts (REITs). These REITs are listed on the New York Stock Exchange and trade on a fairly liquid basis. Any individual REIT maintains investments in any number of properties, from as few as two, to as many as twenty or more. REITs are concentrated real estate investments and should only play a small role in an investor’s otherwise well-managed, diversified portfolio of investments. If your accounts have more than 10% invested in REITs, you should consider setting up an appointment with your financial advisor to discuss your broader asset allocation.
REITS, whether they are traded or the more speculative, illiquid non-traded REITs, may be unsuitable for most retail investors for another reason. Many retail investors have most of their net-worth concentrated in property already – their home – and do not need to have any additional exposure to complicated, potentially high risk investments like REITs.