Real Estate Investment Trusts or REITs are not a new concept. President Dwight D. Eisenhower signed a law in 1960 which created a vehicle for regular people to invest their money into large-scale, income producing real estate like office buildings, apartment complexes and shopping centers.1 Small investors had been locked out of commercial real estate investing because it required a large amount of capital to buy a property outright or join an investment syndicate.
Rule changes in the Tax Reform Act of 1986 fueled the growth of REITS as they could now own and directly operate most types of real estate, rather than operating under the original prohibition against directly operating the properties.
REITs are generally thought to be good investments, outperforming the S&P 500 and offering a 12.4% return since 1972.2 Investors need to be aware, however, that there are different types of REITs. There are publicly traded REITs and then there are private REITs that just lend money. GreenLake Real Estate Fund (GLREF) is one of those private REITs.
The company marketed the fund as a private real estate fund offering steady monthly income. The company delivered on this promise, paying investors monthly dividends of approximately $750. Then in January 2026 the company suffered a liquidity crisis, and tough economic conditions were cited by the company as the reason all dividend payments stopped and all share redemptions were suspended.
Since that time investors have not been given any guidance on when – or whether – dividend payments or share redemptions would be reinstated.
GreenLake Asset Management LLC, with offices in South Pasadena, California and New York, markets the company as providing “creative capital for special situations.” Because GLREF operates as a non-bank direct lender specializing in commercial real estate bridge loans their risk exposure in tough economic times is greater than traditional bank or standard publicly traded equity REITs that buy and manage physical buildings.
GLREF acts as a specialized debt fund doing short-term bridge financing. They also do alternative real estate lending, financing projects that typically do not qualify for conventional bank loans due to tight timelines, complex deal structures, or the distressed nature of the underlying property. Their third area of focus is private placement debt funds where they pool capital from institutional investors and high-net-worth accredited individuals to fund private commercial mortgages.
GreenLake is in the business of real estate origination and debt management, capturing high yields by taking on increased risk of short-term commercial real estate financing. Because of the high-risk nature of their borrowers the risk of loss is greater for their investors.
Brokers and financial advisors in Michigan and other states sold interests in GLREF to investors. Those investors may not have been told of the high-risk nature of their investments. The brokers may not have evaluated the suitability of this investment for their clients or may have misrepresented GreenLake or GLREF to investors. The brokers and financial advisors may be guilty of violating Regulation Best Interest (Reg BI) which is a U.S. Securities & Exchange Commission rule that requires broker-dealers to act in the best interest of retail customers when making securities recommendations meeting four obligations: Disclosure, Care, Conflict of Interest and Compliance.4
Holding Financial Advisors Accountable for Unsuitable Investments
If you have lost your investment and/or your distributions have stopped, call the Law Offices of Peter C Rageas PC at 313-334-7767 and let us recover your damages.
Our Michigan-based securities law firm firm understands the complexities of securities litigation and FINRA arbitration and works to hold financial professionals accountable when investors suffer losses due to improper investment practices.
_____________________________________________________________________________________________________________
1 The History of REITs (1960 – Today)
Link: https://reinvestmenttrust.com/learn/history-of-reits
2 Are REITs a Good Investment? By Matthew DiLallo, 3/9/2026
Link: https://www.fool.com/investing/stock-market/market-sectors/real-estate-investing/reit/are-reits-a-good-investment/?msockid=256ca72df62866580e6bb0cef7c46703
3 GreenLake Asset Management LLC Website
Link: https://greenlakefund.com/
4 SEC Regulation Best Interest
Link: https://www.sec.gov/resources-small-businesses/small-business-compliance-guides/regulation-best-interest