Investor Alert — SSSHT Suspends its Primary Offering, Distributions, and Share Redemptions
On March 30, 2020, in response to “uncertainty relating to the novel coronavirus (‘COVID-19’) pandemic,” Strategic Student & Senior Housing Trust, Inc. (SSSHT) suspended its Primary Offering for the sale of its common stock, including Class Y and Class Z shares. In addition, the board of directors of SSSHT also announced its plan to suspend any further distributions to shareholders, as well as any requests for share redemptions, effective May 3, 2020 (redemption requests for the first quarter of 2020 will not be honored).
Investors in SSSHT may have recourse through FINRA arbitration, or in some cases litigation, to pursue investment losses, provided the investment was recommended by a financial advisor who lacked a reasonable basis for the recommendation, or if the investor was otherwise misled into investing in SSSHT. Headquartered in Ladera Ranch, California, SSSHT was formed as a Maryland corporation in October 2016 and operates as a real estate investment trust (REIT). SSSHT is a public, non-traded REIT “focused exclusively on student housing and senior housing,” having touted these real estate asset classes as “recession-resistant.” As of June 30, 2020, SSSHT disclosed ownership of two student housing properties, four senior housing properties, an approximate 2.6% beneficial interest in Reno Student Housing, DST, and an approximate 1.4% beneficial interest in Power 5 Conference Student Housing I, DST.
As a publicly registered non-traded REIT, SSSHT was sold nationwide to numerous retail investors. In some instances, investors may have been solicited to invest by their financial advisor without being adequately informed of SSSHT’s risk components and complex nature. As a non-traded REIT, SSSHT is a very illiquid investment product, meaning that shares cannot readily be sold on a securities exchange. Further, non-traded REITs are generally very expensive investment products and typically include high up-front fees, including selling commissions to a third-party broker-dealer, as well as organizational and offering expenses. These fees add up quickly and act as an immediate drag on investment performance.
Uninformed investors in non-traded REITs often come to learn too late that their ability to exit their investment position is extremely limited. Such is the case with SSSHT. As it stands, the board of directors of SSSHT has suspended its share redemption program, effective May 3, 2020. Further compounding the problem for investors, SSSHT has also suspended any distributions to shareholders, until further notice. Therefore, investors seeking any liquidity in their SSSHT investment are left with very limited options, including trying to sell shares on a fragmented secondary market, or participating in a tender offer by a third party, to the extent such a tender offer exists.
The attorneys at Giarrusso Law Group LLC have extensive experience in handling claims on behalf of investors in non-traded REITs such as Strategic Student & Senior Housing Trust, Inc., as well as other complex and illiquid financial products. Investors may pursue a claim to recover losses through securities arbitration before FINRA, or in some instances, litigation. Investors who wish to discuss a possible claim are invited to contact us by telephone at (201) 771-1115 or by email at info@gialawgroup.com for a no-cost and confidential consultation.