The independent directors of American Realty Capital New York City REIT Inc., a publicly registered non-traded REIT sponsored by AR Global, approved an estimated net asset value of $21.25 per share. This is the first time that the board has determined an estimated NAV per share for the REIT’s common stock.
New York City Advisors LLC, the REIT’s advisor, engaged Duff & Phelps to perform appraisals of the company’s real estate assets and provide a valuation range of each by using the method that complies with IPA guidelines. The valuation firm also reviewed the company’s other assets and liabilities.
The $21.25 per share NAV is based on an estimated fair value of the company’s assets less the estimated fair value of its liabilities, divided by 30,419,798 shares of common stock outstanding. The company’s real estate assets have a total value of $25.81 per share, with other assets totaling $2.60 per share. The fair value of debt was ($6.56) and other liabilities totaled ($0.60).
The board reviewed the valuations prepared by Duff & Phelps and determined that the value of the real estate assets was $785 million, which was within the valuation range of $736.3 million to $793 million provided by Duff & Phelps.
The advisor noted that applying the low, midpoint and high range of discount rates determined by Duff & Phelps resulted in an estimated per-share NAV range of $19.65 – $21.51 per share on a fully diluted basis. The midpoint in that range was $20.55.
Prior to the adoption of the NAV, the average price paid for shares of the company’s common stock as of June 30, 2016 was $24.79 per share, reflecting issuances under the distribution reinvestment plan and volume discounts.
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 has raised a total of $754.9 million in investor equity as of June 30th.