Calgary-based Walton Group had delivered 12% annual returns in the past, so when the company made its pitch to retail investors, planning to build suburbs on speculative land in the U.S., it likely looked like a good bet. The group was selling the idea of investing $10,000 or more in rural properties outside of fast growing cities like Toronto and Atlanta, according to Bloomberg.

But years later, investors are claiming that their shares are worth only about 20% of what they put in, based on 2017 appraisals. And after $20 billion in land assets, 92,000 investors, and 106,000 acres, about 90 Canadian investors have hired a private investigations firm to track the proceeds of Walton's land syndication.

Meanwhile, the company says it has a new strategy for selling its investors' land and has found potential buyers for almost half of its buildings. An attorney for the company said that a recent project brought in almost double what investors originally paid for it and the company has "a number of important initiatives and opportunities on the horizon and we are excited about what the coming years have in store for Walton and our investors.”

Ryan Kretschmer, general counsel for a Walton affiliate called Walton Global Holdings Ltd. also said that the "severity of the real estate recession was unforeseen, and the recovery in the U.S. has been much slower than expected."

The investors' experience provides a cautionary tale for land speculation years in advance and the perils of being a smaller retail investor. A majority of more than 300 Walton land projects stretching from Alberta to Washington, are delayed, Bloomberg said.

Rob Ivanhoe, a real estate attorney with Greenberg Traurig said:

"Syndication of raw land to retail investors is, in my 35+ years of experience, a very rare approach to investment in real estate both before and after the Great Recession. It does not seem to be the kind of high-risk investment that an unsophisticated individual retail investor can properly evaluate."

Retiree Bruce Coristine invested in Walton's Arcade, Georgia project 11 years ago. Today, the area remains "mostly pastureland for grazing cattle" and Coristine's original $41,000 investment is now worth just $9,300.

Coristine said:

“It seemed to be a very good investment and they were a well respected company, until a point when they weren’t. It was not the worst investment ever, but pretty close."

Walton's original investors profited back in the 1980's after buying land during a deep Alberta recession. Investors netted a 12% IRR in Calgary and Edmonton based projects from 1987 to 2007. Walton was paying sales commissions as high as 13.25% in some cases, despite 6% being more typical for speculative investments.

In the mid 2000's the company moved "heavily" into the U.S., using the same model to buy land outside of Phoenix, Dallas, Atlanta and Washington, D.C. It sold its securities through an “exempt” market intended for savvier investors, but investors were willing to take the risk based on the company's track record.

A markup of five times Walton’s own price wasn’t unusual across hundreds of properties. In one 2008 investment vehicle, Walton bought 304 acres northeast of Atlanta at a price of $13,600 an acre in U.S. dollars, and syndicated it to investors at about $68,000 an acre. Investors didn’t seem to mind as long as Walton sold it to home builders for some multiple of $68,000, and Walton had successfully sold land in Alberta in such fashion a few years earlier. Also, Walton’s efforts to obtain zoning changes and to get rights to develop the land would boost its value.

Steven Kelman, a Canadian investment consultant said: "Still, a reasonably intelligent investor who had seen the markup would have some questions."

Investors began worrying in 2017 when some Walton entities filed for creditor protection in Canada and when some Walton owned land was revalued. Walton then rolled up 133 separate projects across North America into a single vehicle (anyone having housing crisis flashbacks yet?) called Roll Up Corp. After being revalued, on average, "investors got 57 cents of equity in Roll-Up Corp. for each dollar they had originally invested. Some people got as little as 17 cents per dollar, while others got as much as $1.75."

Harlow Russell, an American expat who sold Walton securities from a glassy waterfront office in Singapore said: "We pioneered the ability to say to investors, ‘You can make money anywhere in the planet. Why don’t you do it in a safe environment like Canada?"

Walton touted the stability of the U.S. and Canada, holding sales presentations inside Singapore’s luxurious colonnaded Fullerton Hotel, and salespeople even won lavish trips to places like New Zealand and Prague.

But after the initial Canadian boom, the joy for Walton was short lived.

Russell recalled that, at one point, the company had 92,000 investors worldwide and he was so confident in the project, he invested personally. Now, he just hopes to get his principle back: