Two ARC REITs Amend Share Repurchase Plans
Healthcare Trust and ARC New York City REIT, two publicly registered non-traded REITs sponsored by AR Global, have amended their share repurchase plans, effective July 14th.
The companies will only repurchase shares following the death or qualifying disability of stockholders that purchased shares of common stock or received their shares through noncash transactions. The move is intended to preserve capital that can be used to purchase additional assets and increase distribution coverage.
According to Summit Investment Research, Healthcare Trust has a 45 percent distribution coverage as of the first quarter of 2017 for its 6.8 percent annual distribution rate and is overdistributed by $2.35 per share. ARC New York City REIT had a 19 percent distribution coverage for its 6 percent distribution rate. The company’s cumulative overdistribution tops $2.91 per share.
As reported by The DI Wire yesterday, American Finance Trust also amended its share repurchase plan and reduced distributions paid to stockholders as well.
Healthcare Trust invests in multi-tenant medical office buildings and owns an 8.4 million-square-foot portfolio of 163 properties with a total purchase price of $2.3 billion. The company’s primary offering went effective in February 2013 and closed in November 2014 after raising $2.1 billion in investor equity. Shares were originally sold for $25.00 each and have a net asset value of $21.45 per share, as of December 31, 2016.
American Realty Capital New York City REIT invests in properties located in the five boroughs of New York City, with a focus on Manhattan. The company closed its initial public offering in May 2015 and had raised a total of $764 million in investor equity, as of March 31, 2016. The company owns six properties valued at $785 million, and in October 2016, the company’s board approved an estimated net asset value of $21.25 per share. Shares were originally sold for $25.00 each.
