Carter Validus Mission Critical REIT II Lowers Net Asset Value

The board of Carter Validus Mission Critical REIT II Inc., a publicly registered non-traded real estate investment trust, approved an estimated net asset value per share for the REIT’s Class A, Class I, Class T, and Class T2 shares of common stock, calculated as of October 31, 2019.

The board of Carter Validus Mission Critical REIT II Inc., a publicly registered non-traded real estate investment trust, approved an estimated net asset value of $8.65 per share for the REIT’s Class A, Class I, Class T, and Class T2 shares of common stock, calculated as of October 31, 2019.

The previous NAV per share was $9.25 as of June 30, 2018 and shares originally sold for $10.00 each.

Carter Validus Mission Critical REIT II recently merged with an affiliated non-traded REIT, Carter Validus Mission Critical REIT. The company noted that while the value of its pre- and post-merger real estate portfolio increased, the NAV was negatively impacted by transaction costs incurred from Carter Validus Mission Critical REIT’s debt payoff and other merger-related costs ($0.37), distributions in excess of earnings ($0.08), and a change in the value of interest rate swaps ($0.08).

Other offsets ($0.20) that impacted the valuation primarily include capital expenditures related to properties, leasing commissions, and acquisition fees related to a four-property portfolio the REIT acquired in September 2019.

“We are pleased with the overall increase in value of the real estate portfolio and anticipate that both our new distribution rate, established at the effective time of the merger with [Carter Validus Mission Critical REIT], as well as the anticipated savings from and synergies of the merged entities will result in enhanced value for the stockholders of the company over time,” said Michael Seton, Carter Validus Mission Critical REIT II’s chief executive officer and president.

Robert A. Stanger & Co., an independent third-party valuation firm, assisted with the valuation process and appraised 139 of the 150 properties in the REIT’s real estate portfolio as of October 31, 2019. The remaining properties were either appraised by third parties other than Stanger or were valued based on their contract purchase price.

Carter Validus Mission Critical REIT II invests in data centers and healthcare facilities. As of October 31, 2019, the company owned 150 real estate properties.

The REIT raised approximately $1.2 billion in investor equity after launching its initial primary offering in May 2014, and its follow-on offering closed in November 2018 and raised $129.3 million.

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