Apple REIT Eight Unilaterally Modifies Unit Redemption Policy To Its Investors Detriment

Eccleston Law is assisting Apple REIT Eight investors who are unable to redeem their investments at full value. 

Some investors report being told that David Lerner Associates representatives told investors, at the point of sale, that they would be able to redeem their entire investment after three years for 100 cents on the dollar.  Following a recent change in the Apple REIT Eight redemption policy, this may no longer be the case. 

Apple REIT Eight recently disclosed that investors who have held shares longer than one year may redeem for the lesser of 92% of either the $11 per share purchase price, or the purchase price per unit that the investor paid.  In other words, most investors who try to redeem their shares would suffer an 8% penalty.

The relevant portion of the revised Apple REIT Eight redemption policy reads as follows:

"If you have held Units for the required one-year period, you may redeem your Units for a purchase price equal to the lesser of 92% of either (a) $11 per unit or (b) the purchase price per Unit that you actually paid for your Units. Notwithstanding the foregoing, if you are redeeming all of your Units either (a) due to the death of all Unitholders in one account or (b) purchased through the Company’s Dividend Reinvestment Program, you may redeem such units for a purchase price equal to the lesser of (i) $11 per Unit or (ii) the purchase price per Unit that you actually paid for your Units. In the event that you are redeeming all of your Units, Units purchased pursuant to our Additional Share Option or our dividend reinvestment plan may be excluded from the foregoing one-year holding period requirement, in the discretion of the board of directors."

To many investors, this development may come as a surprise.  Many investors were not fully informed of Apple REIT Eight’s ability to 1) change the purchase price (value) for redemptions and 2) to modify, suspend or terminate the redemption program, both in its sole discretion. 

If you have invested in Apple REIT Eight upon the recommendation of David Lerner Associates and if your understanding of the redemption program is inconsistent with the disclosure made above, please contact one of our attorneys at 312-332-0000.  Our attorneys are representing investors who have suffered losses investing in Apple REIT Eight along with those who are seeking to rescind (get out of) their investment in this product.