The board of Carter Validus Mission Critical REIT II Inc., a publicly registered non-traded real estate investment trust, is urging investors reject an upcoming unsolicited tender offer made by Comrit Investments 1, which is offering to purchase up to 449,438 Class A shares and 112,360 Class T shares of the REIT for $7.12 each. The offer expires on June 28, 2019, unless extended.
Carter Validus Mission Critical REIT II’s most recent net asset value per share for both Class A and Class T shares was $9.25 as of June 30, 2018, approximately 30 percent higher than Comrit’s offer price.
According to a letter to shareholders, the REIT’s board believes the tender offer is “an attempt by Comrit to capitalize on the recent amendment to the company’s share repurchase program.”
In April, after announcing plans to merge with an affiliated non-traded REIT, Carter Validus Mission Critical REIT, the company decided to limit share repurchases beginning with those processed in the third quarter of 2019 to only requests made in connection with the death, qualifying disability or other involuntary exigent circumstance of a stockholder.
While there is no guarantee it will do so, the REIT said that it expects the board of the combined company will determine the terms of the share repurchase program after the merger is consummated.
The REIT concluded, “We believe the Comrit offers represent an attempt to catch current stockholders off-guard and acquire the shares at a low price in order to make a profit and, as a result, deprive the stockholders…of the potential long-term value of the shares.”
Carter Validus Mission Critical REIT II invests in net leased data center and healthcare assets and raised approximately $1.2 billion in investor equity after launching its initial primary offering in May 2014. The company’s follow-on offering, which closed in November 2018, raised $86.9 million as of July 23, 2018. The REIT’s $1.9 billion portfolio was comprised of 85 properties as of March 2019.