Investors who put their money into Inland Western REIT are just realizing the extent of losses they’ve actually suffered. That’s because the non-traded real estate investment trust (REIT) just went public, giving investors a first-time look at its true worth.
In April, the initial public offering price was set at $8 a share for the Inland Western REIT, now known as Retail Properties of America. The price was well below the expected $10 to $12 pre-offering price. Moreover, some highly complicated reverse-stock-split engineering was required to even reach the $8 mark.
For investors who initially purchased the investment at $10 share a decade ago, the split-adjusted value of their investment following the IPO is less than $3. In other words, those investors lost some 65% of their original investment.
In another unexplained move, Retail Properties decided to offer only a quarter of the shares during Inland Western’s initial public offering. Three follow-up stock sales are planned over the next 18 months.
After the IPO, company president and chief executive Steven Grimes stressed in a letter to shareholders the impact of the economic recession on the real estate industry.
“It is uncertain if and when we will see a full recovery,” he states in the letter.
If you’ve suffered losses in Inland Western/Retail Properties of America, tell us your story. Maddox Hargett & Caruso currently is investigating unsuitable sales of non-traded REITs, including Inland Western, Inland American and Behringer Harvard REIT I.