Griffin Capital Essential Asset REIT Inc., a publicly registered non-traded real estate investment trust, has reduced the distribution rate paid to investors and transitioned to publishing its net asset value per share on a quarterly rather than daily basis.
The company made the changes because it believes it is prudent to enact a more conservative cash management strategy in light of the current environment, and in consideration of its future strategic positioning and plans.
Griffin Capital Essential Asset REIT recently suspended its follow-on offering, share redemption program, and distribution reinvestment plan in order to evaluate a potential strategic transaction, as reported by The DI Wire in February.
The REIT plans to declare distributions on a monthly basis, as opposed to quarterly, and has reduced its all-cash distribution rate, based on 366 days in the calendar year, to $0.000956284 per day, or $0.35 per share annualized. The change will begin with April 2020 distributions to be paid in early May 2020.
In December 2019, the board declared cash distributions of $0.001502732 per day, or approximately $0.55 per share annualized, from January 1, 2020 through March 31, 2020.
In addition, the REIT plans to publish its NAV share on a quarterly basis, rather than daily, with the first likely disclosed on June 30, 2020.
“While the COVID-19 virus has not yet impacted the [company’s] earnings or liquidity, the virus has resulted in interim disruption to the operations of some of its tenants which may affect their ability to make timely rent payments in the near term…,” the company said in a filing with the Securities and Exchange Commission. “The [company…] believes implementing this strategy in the current market environment may present an opportunity to make strategic acquisitions which will serve to enhance the portfolio’s long-term value and performance.”
Griffin Capital Essential Asset REIT is a self-managed REIT with a portfolio consisting primarily of single tenant business essential properties throughout the United States, diversified by corporate credit, physical geography, product type, and lease duration. As of the fourth of 2019, the company’s portfolio consisted of 99 office and industrial properties (122 buildings) valued at approximately $4.6 billion.