The board of InPoint Commercial Real Estate Income Inc., a commercial mortgage real estate investment trust, has suspended the company’s public offering, share repurchase plan, distributions, and distribution reinvestment plan, citing the coronavirus (COVID-19) pandemic as the reason for the decision.
InPoint is advised by an affiliate of Inland Real Estate Investment Corporation and sub-advised by an affiliate of Sound Point Capital Management LP.
“The temporary closure of non-essential businesses in order to limit the spread of this virus has had an unprecedented impact on every type of commercial real estate,” said Mitchell Sabshon, chief executive officer of InPoint. “These closures, and the unemployment we are seeing as a result, are already adversely affecting the ability of commercial and residential tenants to pay rent. In turn, this raises the risks that the property owners to whom we have made loans may be unable, for some period of time, to make scheduled mortgage payments in full when due.”
“These circumstances make it difficult for us to accurately determine the true value of our assets and, as a result, confidently calculate an accurate net asset value per share of our common stock,” he added. “Accordingly, the board acted quickly and responsively to suspend the offering and take decisive steps to protect our company and the capital of our stockholders.”
The board believes that this is a temporary market disruption and plans to monitor the situation in order to determine an appropriate time to resume the offering, the SRP, the payment of distributions, and the DRP, the company said in a statement.
The REIT has sourced and originated $661 million in first mortgage loans.
InPoint Commercial Real Estate Income oversees a portfolio of first mortgage loans, CMBS and credit loans are secured by multifamily, industrial, office, hospitality, student housing and retail real estate assets located across the United States. The company raised $276.7 million in its private offering from October 2016 to July 2019, and raised $38.3 million in its public offering from May 2019 through March 10, 2020.