The board of Healthcare Trust Inc., a publicly registered non-traded real estate investment trust sponsored by AR Global, has approved a $17.50 net asset value per share of the company’s common stock as of December 31, 2018.
The valuation represents a decrease of nearly 13.6 percent compared to last year’s NAV per share of $20.25. Shares were originally sold for $25.00 each.
The decrease, the company said in an SEC filing, was primarily due to the effect of paying distributions to the company’s stockholders that exceeded cash flows from operations by $37.3 million, as well as a $30.5 million decrease in the value of its real estate assets compared to last year.
The company previously lowered its annual distribution rate from $1.45 to $0.85 per share on March 1, 2018, and previously from $1.70 per share to $1.45 per share on April 1, 2017.
The NAV per share is based on the estimated fair value of the company’s assets, less the estimated fair value of its liabilities, divided the number of shares outstanding.
Healthcare Trust engaged Duff & Phelps LLC, an independent third-party real estate advisory firm, to assist with the valuation which was performed within Investment Program Association guidelines. Duff & Phelps provided an estimated range of $16.95 – $19.00 per share on a fully diluted basis, with a midpoint of $17.92 per share.
The REIT noted that the value of the real estate assets includes an adjustment of $38.8 million below the midpoint of the range provided in the Duff & Phelps report. The concluded value of the real estate assets reflects an overall increase of 10.6 percent over the original cumulative purchase price of $2.2 billion, and post-acquisition capital expenditures of $105.8 million, which includes $80.8 million of costs related to the one development property in Jupiter, Florida.
The Jupiter, Florida property was valued at construction cost plus the market value of the land. Due to a dispute with the developer, the REIT said that it has funded excess development costs and has not yet received any rental income from the property.
In other Healthcare Trust news, the board recently amended the company’s existing share repurchase program to change the date on which repurchases will be made. For share repurchase requests made during the period beginning March 13, 2018 and ending December 31, 2018, proceeds will be distributed no later than April 30, 2019. Previously, the company planned to distribute proceeds by March 31, 2019.
Healthcare Trust invests in multi-tenant medical office buildings and owned a portfolio of 191 properties, as of the fourth quarter of 2018. 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.