Dividend Capital Fund Encouraging Proxy Votes with Charitable Donations

To encourage votes for its proposed restructuring plan, the sponsor of Dividend Capital Diversified Property Fund, a daily NAV REIT (NASDAQ: ZDPFAX; ZDPFEX; ZDPFIX; ZDPFWX), is offering to make a $50 donation to St. Jude Children’s Research Hospital for each shareholder that casts their current proxy vote this week, up to a total of $25,000. The company recently adjourned its annual meeting of stockholders to September 1st to solicit additional votes.

Dividend Capital is seeking to make a number of changes to its share classes and overall fund structure, including capping and lowering certain underwriting compensation paid by shareholders, lowering the advisor’s asset management fee and eliminating the disposition fee, migrating from a daily to monthly net asset valuation, revising the compensation paid to dealer manager Black Creek Capital Markets LLC (formerly Dividend Capital Securities LLC), and combining the share redemption program for each share class into a single program for all stockholders.

Specifically, the company plans to change its currently outstanding Class A, Class W and Class I shares to Class T, Class D and a new version of Class I shares, respectively. The company also plans to change its currently outstanding unclassified shares (referred to as “Class E” shares since the daily NAV REIT’s inception) to a new formally designated class of Class E shares, as well as create a new class called Class S shares. Class E shares will continue to be free from class-specific expenses.

If approved, Class T shares (Class A shares) will include a 3 percent selling commission, a 0.50 percent dealer manager fee, and ongoing fees (distribution, dealer manager, or stockholder servicing fee) of 0.85 percent. Class A shares currently include a 3 percent selling commission, no dealer manager fee, and ongoing fees of 1.10 percent.

If approved, Class D shares (Class W shares) are for fee-based accounts and have no selling commission or dealer manager fees, but include an ongoing fee of 0.25 percent. Class W shares currently have no upfront commissions or expenses, but include an ongoing fee of 0.60 percent.

Class I shares are for institutional investors and have no selling commission, dealer manager fees, or ongoing fees. Class I shares currently include a 0.10 percent ongoing fee.

The new Class S shares will include a 3.5 percent include a 3.5 percent selling commission, no dealer manager fee, and ongoing fees of 0.85 percent.

Volume discounts, which currently start with share purchases of $500,000, will be reduced to purchases of $150,000. Underwriting compensation paid by shareholders will be capped at 8.75 percent.

The company intends to decrease the fixed portion of the advisory fee paid to Dividend Capital Total Advisors LLC from an annual rate of 1.15 percent of NAV to an annual rate of 1.10 percent of NAV.

Dividend Capital Diversified Property Fund, based in Denver, Colorado, invests in a portfolio of commercial real estate assets. The company’s original offering went effective in January 2006 and has raised more than $2.4 billion in investor equity through multiple follow-on offerings. The company owned 51 properties with an investment cost of approximately $2.5 billion, as of June 30, 2017.

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