The board of Healthcare Trust Inc., a publicly registered non-traded real estate investment trust sponsored by AR Global, has amended the company’s distribution policy and share repurchase program. Future distributions to shareholders will be paid in shares of common stock instead of cash, and share repurchases under the SRP were suspended.
The company indicated that the changes were made to preserve liquidity and maintain additional financial flexibility in light of the COVID-19 pandemic. Additionally, the company’s recently amended credit facility restricts the REIT from repurchasing shares or paying cash distributions to holders of common stock until at least the second quarter of 2021. The REIT is not restricted from paying dividends on its Series A Preferred Stock. These restrictions will continue to apply unless certain conditions related to liquidity and leverage are met.
In a filing with with Securities and Exchange Commission, the company indicated that any future distributions, if and when declared, will be paid on a quarterly basis in arrears in shares of common stock valued at the net asset value per share. The number of shares paid will continue to be based on the prior cash distribution rate of $0.85 per share per year, the company said.
The company’s most recent NAV per share is $15.75 as of December 31, 2019, and shares were originally priced at $25.00 each.
Because shares of common stock are only offered and sold through the distribution reinvestment plan, the company said that DRIP participants will not be able to reinvest in shares as long as it pays distributions in stock instead of cash.
Repurchases under the SRP were also suspended, effective August 12, 2020, and the board rejected all repurchase requests made since January 1, 2020. No further repurchase requests may be made unless the SRP is reactivated, the company said.
Healthcare Trust invests in multi-tenant medical office buildings and owned a portfolio of 200 properties, as of the second quarter of 2020. The company’s primary offering was declared effective by the SEC in February 2013 and closed in November 2014 after raising $2.2 billion in investor equity. The company launched its Series A Preferred Stock offering (Nasdaq: HTIA) in December 2019.