The board of CNL Healthcare Properties, a publicly registered non-traded real estate investment trust, approved an estimated net asset value per share of $7.81, as of December 31, 2019.
The NAV is based on the estimated value of the company’s assets minus the estimated value of its liabilities divided by the approximate number of shares outstanding on a fully diluted basis, calculated as of December 31, 2019. Robert A. Stanger & Co., Inc., an independent third-party valuation firm, assisted with the valuation.
CNL Healthcare Properties’ previous NAV per share was $7.99 as of December 31, 2018 and reflects a $2.00 per share special distribution paid last May and $0.02 adjustments relating to closing costs from certain asset sales. Shares originally sold for $10.00 each.
The company said that the estimated NAV was impacted by a reduction in real estate assets given various property sales and a reduction in fair market value of debt from reduced borrowings.
Specifically, the company noted, the appraised value of its 71 seniors housing assets, one parcel of land and two acute care facilities declined by 2 percent when compared to the previous NAV per share. The year-over-year decline in appraised values was driven by cap rate expansion and slightly lower estimates of future earnings growth, which serve to reflect the expected moderation of occupancy growth.
“The estimated NAV does not attempt to quantify at this time any effect the novel coronavirus (COVID-19) may have on the financial condition of the company or marketability of its assets,” the REIT stated in a letter to shareholders.
The company said that the valuation process was completed in compliance with its valuation policy and certain methodologies promoted by the Institute for Portfolio Alternatives, a trade association for non-traded investment products.
CNL Healthcare Properties closed its offering in September 2015 after raising more than $1.7 billion in investor equity. As of December 31, 2019, the company’s $2 billion real estate portfolio consisted of interests in 81 assets, including 72 seniors housing communities, seven post-acute care facilities and two acute care hospitals.