Carter Validus Mission Critical REIT II Completes Internalization and Changes Name

Carter Validus Mission Critical REIT II Inc., a publicly registered non-traded real estate investment trust, has internalized management and changed its name to Sila Realty Trust Inc.

The plans were announced in July after the REIT and Carter Validus Operating Partnership II LP (now named Sila Realty Operating Partnership LP) agreed to purchase all of the assets from its fomer sponsor and advisor, Carter Validus REIT Management Company II and Carter Validus Advisors II, respectively.

As a result of the transaction, the company anticipates its expenses will decrease by approximately $18 million on an annualized basis starting in the fourth quarter of 2020 due to the elimination of asset management, property management and other various fees that would have otherwise been paid to the sponsor.

The company said previously that the internalization cost would be approximately $40 million, payable over an approximately two-year period.

Employees and key executives previously employed by the former sponsor are now employees of Sila Realty Trust through a subsidiary.

“In addition to the significant annual cost savings we expect to achieve, we believe that the transaction will be transformational to the strategic direction of the company as we continue to focus on delivering stockholder value by investing in properties that benefit from macro and microeconomic growth drivers in the economy,” said Michael Seton, chief executive officer and president.

John E. Carter agreed to resign as a director, effective on September 30, 2020, and the board reduced its size to five members, four of whom are independent. The board also established a compensation committee and a nominating and corporate governance committee.

The REIT’s most recent net asset value per share is $8.65, as of October 31, 2019.

Sila Realty focuses on net-leased data center and healthcare properties and raised approximately $1.2 billion in investor equity after launching its initial primary offering in May 2014. Its follow-on offering closed in November 2018 and raised $129.3 million. As of June 30, 2020, the company owned 152 real estate properties, consisting of 29 data centers and 123 healthcare properties located in 69 markets across the United States, aggregating approximately $3.1 billion in invested assets.

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