The board of directors of CNL Healthcare Properties, a publicly registered non-traded real estate investment trust, has approved a 10 percent increase in the company’s quarterly cash distribution from $0.10581 to $0.11639 per share, effective for the third quarter of 2017. The distribution will be paid on or about September 11, 2017, for shareholders of record as of the close of business September 1, 2017.
Based upon the final offering price of $10.58 per share, the new annualized distribution rate increases from 4.0 percent to approximately 4.4 percent. Based upon the current estimated net asset value per share, the new annualized distribution rate equals approximately 4.6 percent.
The company said that the decision to increase the distribution was based on overall performance of the 142-property portfolio and organic growth in the company’s cash flow. In addition, the company noted that it has now completed and opened all but one of the 15 development, expansion or conversion projects as part of its capital deployment strategy.
CNL Healthcare Properties noted that it has fully invested its offering proceeds of approximately $1.7 billion and remains focused on continuing to lease-up and stabilize its ground-up development, expansion and value-add investments.
“Since our first investment in early 2012, we have worked diligently to both create a young and high-quality portfolio, and work closely with our tenants, operators and managers to continually drive and strengthen the performance of our investments,” said Stephen Mauldin, president and CEO of CNL Healthcare Properties. “We are quite pleased to now increase the level of cash distributions to our shareholders, which is directly correlated with the performance and maturation of the portfolio.”
According to Summit Investment Research, CNL Healthcare Properties had a 104 percent distribution coverage for its 4 percent cash distribution during the second quarter of 2017, based on modified funds from operations. The CNL Healthcare board plans to evaluate the amount of its distributions on a quarterly basis.
CNL Healthcare Properties focuses on acquiring properties in the seniors housing and healthcare sectors, including stabilized, value-add and development assets, as well as other income-producing properties, real-estate related securities and loans. The offering was declared effective in June 2011 and closed in September 2015 after raising $1.7 billion in investor equity. The company’s 142-property portfolio was purchased for a total of $2.9 billion, according to Summit Investment Research.