CIM Income NAV Inc., a publicly registered non-traded real estate investment trust formerly known as Cole Real Estate Income Strategy Inc., has limited the number of shares that can be redeemed through its share redemption plan. The company indicated that the change is temporary and was made in order to maintain a reasonable level of liquidity, and plans to return to its previous limits in the fourth quarter of 2020.
Effective immediately, monthly redemptions will be limited to shares whose total value is no more than 0.8 percent of the total net asset value as of the last calendar day of the previous calendar month. In any calendar quarter, redemptions will be limited to shares whose total value is no more than 2 percent of the aggregate NAV as of the last calendar day of the previous calendar quarter.
“Given the recent levels of investor subscriptions and increased redemption requests, which the company believes have been exacerbated by the challenging economic environment caused by the COVID-19 pandemic, the company’s stated objectives of maintaining target liquidity and satisfying the redemption plan limits are in conflict,” stated CIM Income NAV in a filing with the Securities and Exchange Commission.
The REIT added, “As such, the company is temporarily redeeming less than the redemption plan limits to maintain this target liquidity while the company seeks to generate additional liquidity through investor subscriptions and execution of an in-process asset disposition program.”
The company’s investment guidelines, to maintain a reasonable amount of liquidity, provide it will target 10 percent of the NAV up to $1 billion, and 5 percent of the NAV in excess of $1 billion to relatively liquid investments.
Prior to the adjustment, the company’s share redemption plan limits redemptions to 2 percent of the aggregate NAV as of the last calendar day of the previous calendar month, and in any quarter, to shares whose total value is no more than 5 percent of the aggregate NAV as of the last calendar day of the previous calendar quarter.
Additionally, the board of CIM Income NAV has agreed to take 50 percent of their quarterly compensation in common stock, based on the then current NAV per share at the time of grant, for the third and fourth quarter of 2020. The REIT’s manager has also agreed to take 50 percent of its monthly advisory fees in common stock, beginning with the monthly advisory fee payment for August 2020, through December 31, 2020.
The board authorized a distribution for the month of July 2020 of $0.0777 per share of the company’s Class D, Class T, Class S and Class I common stock. The distribution for each class is payable to stockholders of record as of the close of business on July 30, 2020 and will be paid on August 3, 2020.
The board authorized a year-end distribution of $0.0839 per share payable to stockholders of record as of the close of business on December 30, 2020 and will be paid in January 2021.
As of June 30, 2020, CIM Income NAV owned a portfolio of 126 properties in 34 states purchased for $894 million. The portfolio is comprised of five anchored shopping centers, 99 retail, 11 industrial and distribution, and 11 office properties, totaling approximately 5.4 million gross rentable square feet.
The REIT raised approximately $868 million in investor equity as of July 29, 2020. In early April 2020, the company announced plans to modify its public offering from a daily to a monthly net asset value REIT.