ARC’s Retail Centers of America Declares $9.00 NAV Per Share
American Realty Capital — Retail Centers of America Inc., a publicly registered, non-traded real estate investment trust, announced that its board of directors approved an estimated net asset value of $9.00 per share of common stock. This is the first time that the board has determined an estimated per-share NAV for the company.
American Realty Capital Retail Advisor, the REIT’s advisor, engaged Duff & Phelps LLC, an independent third-party real estate advisory firm, to perform appraisals of the company’s real estate assets and to provide valuations of the company’s debt and remaining liabilities.
Duff & Phelps’ method complied with the Investment Program Association guidelines and included a range of $8.76 – $9.23 per share on a fully diluted basis. The midpoint in that range was $9.00.
American Realty Capital — Retail Centers of America commenced its initial public offering in March 2011 for up to 150 million shares of common stock at a price of $10.00 per share. The IPO closed in September 2014, but the company registered an additional 25 million shares of common stock to be used under its distribution reinvestment plan. The company offered DRIP shares at $9.50 per share.
Since the company determined a new NAV per share, the purchase price under the DRIP will reflect this. Under the DRIP, beginning with reinvestments made on April 1, 2016, distributions may be reinvested in shares of common stock at a price equal to the estimated NAV per share.
In addition, under the new stock repurchase plan, the price for shares repurchased by the company will reflect the new NAV and be based on the length of time investors have held their shares.
· After one year from the purchase date — 92.5 percent of the estimated per-share NAV;
· After two years from the purchase date — 95 percent of the estimated per-share NAV;
· After three years from the purchase date — 97.5 percent of the estimated per-share NAV;
· After four years from the purchase date — 100 percent of the estimated per-share NAV.
American Realty Capital — Retail Centers of America owns 35 properties with a total purchase price of $1.2 billion, comprised of 7.5 million rentable square feet. As of December 31, 2015, the company had 96.9 million shares of common stock outstanding and had raised $961.7 million in investor equity.
The board terminated the offering following a series of scandals surrounding AR Capital, its sponsor, and Realty Capital Securities, its dealer manager, which led to the termination of all AR Capital-sponsored investment programs and an agreement by RCS to terminate its business.
