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MacKenzie Commences Tender Offer for ARC Healthcare III Shares

MacKenzie Realty Capital Inc., a non-traded business development company, has offered to purchase up to 200,000 shares of American Realty Capital Healthcare Trust III for $12.05 each. The offer, which constitutes 2.9 percent of the outstanding shares, expires on July 17, 2017.

ARC Healthcare III had 3,834 shareholders owning a total of 6.7 million shares. MacKenzie does not currently own any shares of the REIT, but would pay approximately $2.4 million if all 200,000 shares are tendered.

In a letter to shareholders, MacKenzie noted that the REIT has an infinite life and has not yet disclosed when it plans to liquidate. MacKenzie also said that the REIT’s share repurchase program was oversubscribed last year, requests to repurchase approximately 200,000 shares went unfulfilled earlier this year, and the distribution reinvestment plan was suspended during its strategic review.

ARC Healthcare III has not declared a net asset value per share at this time, but shares were originally sold for $25.00 each, and MacKenzie estimates that the REIT could have a liquidation value of approximately $20.17 per share.

ARC Healthcare III sent a letter urging shareholders to reject the unsolicited offer, saying that the price is too low and that MacKenzie incorrectly states that the REIT has not discussed its liquidity strategy. The REIT clarified that a special committee of independent directors is considering a range of strategic alternatives, but has yet to make a decision to enter into any transaction at this time.

American Realty Capital Healthcare Trust III raised $168 million prior to the cancellation of its offering following a series of ARC-related scandals, and currently owns a portfolio of 19 properties purchased for $128 million.

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