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Risks and Suitability

An investment in securities of Behringer Harvard programs is subject to significant risks that are described in more detail in the "Risk Factors" and "Conflicts of Interest" sections of the applicable prospectus. Investments in Behringer Harvard programs are not suitable for all investors. Refer to the applicable prospectus for a detailed discussion of risks and suitability standards for your state. An investment in investment programs sponsored by Behringer Harvard involves significant risks, including the following:

  • There is no public trading market for securities of these investment programs, and there is no program that can assure you that one will ever develop. Until such securities are publicly traded, investors will have difficulty selling their securities, and even if investors are able to sell their securities, they will likely have to sell them at a substantial discount.
  • These investment programs are generally “blind pool” offerings because the investment programs have generally not identified any assets to acquire and investors will not have the opportunity to evaluate an investment program's investments prior to its making them. Investors must rely totally upon the investment program's advisor’s or general partner’s ability to select the investment program's investments.
  • The number of properties that an investment program will acquire and the diversification of its investments will be reduced to the extent that it sells less than all of the securities it offers. If the investment program does not sell substantially more than its minimum offering, it may buy only one property or very few properties, and the value of an investment in this program may fluctuate more widely with the performance of the specific investment or investments. There is a greater risk that investors will lose money in their investment if the investment program cannot diversify its portfolio of investments by geographic location and property type.
  • The investment program's ability to achieve its investment objectives and to pay dividends depends on the performance of its advisor or general partner for the day-to-day management of the investment program's business and the selection of its real estate properties, mortgage loans, and other investments.
  • After evaluation of each investment program, a new entity is established to be its investment advisor or general partner. As such, the investment program's advisor or general partner does not have any prior experience sponsoring a public real estate investment trust. In addition, not all of the investment program’s officers or directors, nor the officers and directors of its advisor or general partner, have extensive experience with each type of investment that an investment program is authorized to make.
  • Each investment program will pay significant fees to its advisor or general partner and their respective affiliates, some of which are payable based upon factors other than the quality of services provided to the investment program.
  • The investment program's advisor or general partner will face various conflicts of interest resulting from its activities with affiliated entities, such as conflicts related to allocating the purchase and leasing of properties between the various Behringer Harvard investment programs, conflicts related to any joint ventures between the various investment programs and conflicts arising from time demands placed on the investment program's sponsor in serving other Behringer Harvard programs.
  • These investment programs may incur substantial debt. Loans obtained by an investment program will be secured by some of its properties, which will put those properties at risk of forfeiture if the investment program is unable to pay its debts and could hinder the investment program's ability to pay dividends to its stockholders in the event income on such properties, or their value, falls.
  • To ensure that the investment programs that are real estate investment trusts ("REITs") continue to qualify as such for federal income tax purposes, the charters for each of those programs prohibit any stockholder from owning more than 9.8% of its outstanding common stock.
  • The investment programs that are REITs may not qualify or remain qualified as a REIT for federal income tax purposes, which would subject it to the payment of tax on its income at corporate rates and reduce the amount of funds available for payment of dividends to its stockholders.
  • Real estate investments are subject to general downturns in the industry as well as downturns in specific geographic areas. The investment program cannot predict what the occupancy level will be in a particular building or that any tenant or mortgage loan borrower will remain solvent. The investment program also cannot predict the future value of its properties. Accordingly, the investment program cannot guarantee that an investor will receive cash distributions or appreciation of their investment.
  • Investors will not have preemptive rights as an equity holder, so any shares issued by the investment program in the future may dilute an investor’s interest in the investment program.
  • The REIT’s share redemption program can be amended or terminated at any time at the sole discretion of the REIT and the REIT will not redeem, during any 12-month period, more than 5 percent of the weighted average number of shares outstanding during the 12-month period immediately prior to the date of redemption.
  • These investment programs may invest some or all of their offering proceeds to acquire vacant land on which a building will be constructed in the future. This type of investment involves risks relating to the builder's ability to control construction costs, failure to perform, or failure to build in conformity with plan specifications and timetables. The investment program will be subject to potential cost overruns and time delays for properties under construction. Increased costs of newly constructed properties may reduce its returns to investors, while construction delays may delay its ability to distribute cash to investors.
  • The vote of owners owning at least a majority of the investment program's shares will bind all of the owners as to certain matters such as the election of directors and an amendment of the investment program's charter or partnership agreement.
  • Each of the investment program's executive officers or general partners also serves as an officer of the investment program's advisor or general partner, its property manager, its dealer manager, and other affiliated entities, and as a result they will face conflicts of interest relating from their duties to these other entities.
  • Behringer Harvard real estate professionals have relatively less experience with respect to international investments as compared to domestic investments, which could adversely affect our return on international investments.
  • A copy of the prospectus will be made available to you by clicking here.