The board of Cottonwood Multifamily REIT II Inc., a Regulation A+ real estate investment trust sponsored by Cottonwood Residential, approved a net asset value of $10.46 per share for the company’s common stock as of September 30, 2019.
The valuation represents a 4.6 percent increase from the original purchase price of $10.00 per share. The current distribution rate remains unchanged at $0.525 per share on an annualized basis.
Cottonwood Multifamily REIT II owns two multifamily properties located in Durham, North Carolina and Westborough, Massachusetts, purchased for a combined $130 million. REIT II owns a 90 percent and 65 percent interest in the properties, respectively, both of which were purchased in joint ventures with affiliates of Cottonwood Residential O.P. LP.
The properties have a combined appraised market value of $140.3 million as of September 30, 2019 and were appraised by Colliers International and Cushman and Wakefield.
The company noted that the portfolio’s loan-to-value is 51 percent based on the new appraised values, a reduction from the initial LTV of 55 percent.
“We are pleased with the progress that Cottonwood’s operations and property management teams have made in driving revenue and net operating income growth at the two properties,” said Adam Larson, chief financial officer of the REIT. “While it is still early in our investment period, we believe our strategy is being validated by the early signs of asset value appreciation since initial acquisition.”
The company noted that the NAV considered metrics such as cash flows, comparable sales metrics, capitalization rates, loan balances, interest rates and financial projections.
Cottonwood Multifamily REIT II fully subscribed its $50 million offering in August 2018.