Reliable news sources have reported that Behringer Harvard Strategic Opportunity Fund I and II will report catastrophic losses to investors this Friday. Behringer Harvard informed brokers last week of the fund problems and is preparing to tell investors.
Launched in 2005, the Behringer Harvard Strategic Opportunity Fund I raised $65 million and invested in six properties, including a hotel on Wilshire Boulevard in Los Angeles and an office building in Amsterdam. A related fund, Strategic Opportunity Fund II, raised $62 million over a similar period of time.
Behringer Harvard Opportunity REIT I saw its estimated value decline 46% at the end of 2011 to $4.12 a share, from $7.66 a year earlier. In June, one property in that REIT went into bankruptcy protection.
Also as of Dec. 31, investors in the Behringer Harvard Short-Term Opportunity Fund I LLP, which had about $130 million in total assets, saw its valuation drop to 40 cents a share, down drastically from $6.48 a share as of Dec. 31, 2010.
According to the company’s web site, the programs sponsored and managed by the Behringer Harvard group of companies have attracted more than $5 billion in equity which has been invested into more than $11 billion in assets.
With the collapse of the housing markets and real estate sector, REIT fraud has become more apparent. Investors are bringing claims against their brokerage firm or financial advisors that recommended unsuitable, for fraudulent REITS that were Ponzi schemes or for failing to disclose the high fees and commissions associated with the sale of REIT investments.
If you are an investor that lost more than $100,000, you should consider all legal options.