Cottonwood Communities Inc., a publicly registered non-traded real estate investment trust, has temporarily suspended its primary offering, share repurchase program, and distribution reinvestment plan, in order to evaluate a potential merger transaction.
“At this time, the company is unable to share additional information on the potential transaction,” the company said in a letter to financial advisors. “However, the board of directors is working diligently to evaluate the mergers and we will share additional information with our broker dealer partners, financial advisors and investors upon the conclusion of the process.”
The company said that subscription agreements will be accepted only if they are signed and dated, fully funded, and in good order on or before the close of business on December 21, 2020.
As a result of the share repurchase program suspension, no redemptions will be honored for the fourth quarter of 2020 and any pending requests will remain in the queue, unless rescinded, and considered when the program is resumed at a later date.
Due to the suspension of the distribution reinvestment plan, all future distributions will be paid fully in cash until the program is resumed.
The suspensions will remain in place until the board approves their resumption.
Cottonwood Communities launched its $675 million offering in August 2018 and has raised $115.5 million as of September 30, 2020. As of the third quarter of 2020, the REIT owned multifamily apartment communities in West Palm Beach, Florida and the Greater Boston, Massachusetts area; issued a B Note secured by a deed of trust on a multifamily development project in Allen, Texas; made a two preferred equity investments in multifamily development projects in Ybor City, Florida and Queens, New York; and entered into an agreement to provide a preferred equity investment for a multifamily development project in Denver, Colorado.
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