Benefit Street Partners Realty Trust Inc., a publicly registered non-traded real estate investment trust, has agreed to sell up to approximately $97 million of its shares of common stock to certain institutional investors, officers of the REIT, and owners, employees and associates of its external manager, Benefit Street Partners LLC.
Benefit Street Partners Realty Trust was formerly known as Realty Finance Trust and managed by AR Global before Benefit Street took over as its new advisor at the end of September 2016.
The company plans to sell the shares in one or more closings, and the shares will be discounted 10 percent of the GAAP book value per share as of December 31, 2017. The REIT has not yet filed its 2017 year-end financials, so for illustrative purposes only, a 10 percent discount to the GAAP book value per share as of September 30, 2017 is $17.16 (i.e. 10 percent discount to $19.07).
However, the company also agreed to sell shares to the first investors who committed at a 12 percent discount rather than the 10 percent discount.
The REIT further agreed that if subsequent investors in the offering are permitted to acquire shares for less than 90 percent of book value, the effective purchase price of the first investors will be adjusted downward.
The company also agreed to enter into a liquidity event, such as a listing of the common stock on a national exchange, by February 14, 2021.
The investors agreed not to sell or transfer the shares before the company has been listed on an exchange for at least 180 days. In addition, the investors will not be eligible to participate in the company’s share repurchase program for at least three years.
Benefit Street Partners Realty Trust intends to use the net proceeds to originate and acquire additional commercial real estate debt investments and for working capital and other general corporate purposes.
Benefit Street Partners Realty Trust focuses on commercial real estate debt investments secured by income-producing properties and targets loans and securities – diversified by duration, geographic location, property type, ownership, and tenancy. The REIT commenced operations in November 2012 and raised $786 million in investor equity prior to closing the offering in January 2016. As of September 30, 2017, the company’s debt portfolio consisted of 73 loans totaling $1.4 billion, according to Summit Investment Research.