The board of InvenTrust Properties Corp., a publicly registered non-traded real estate investment trust, has declared an increased distribution rate and lower net asset value per share for the company’s common stock, according to filings with the Securities and Exchange Commission.
Beginning in April 2021, the annual cash dividend will increase 3 percent, from $0.0759 per share to $0.0782 per share, and is expected to be paid to stockholders of record as of March 31, 2021. The company noted that its annual distribution rate is not affected by the board’s determination of the estimated per share value.
“This is our fifth consecutive year of a 3 percent increase in our annual distribution rate,” the company stated in a letter to shareholders. “Unlike many retail REITs that reduced or suspended their distribution in 2020, InvenTrust has maintained the company’s distribution rate and continued to pay our dividend throughout the year. The company’s ability to pay our dividend and now increase our rate is driven by the essential nature of our portfolio and disciplined approach to balance sheet management.”
The company’s new net asset value per share is $2.89 as of December 1, 2020, a decrease of $0.25 from the previous NAV per share of $3.14 as of May 1, 2019.
The NAV per share is based on the estimated value of the company’s assets, less the estimated value of its liabilities, divided by the number of outstanding shares, all as of December 1, 2020.
Duff & Phelps, a third-party firm, assisted with the valuation process and provided a range of values ($2.76 to $3.03 per share), with an approximate midpoint of $2.89 per share.
“As anticipated, the negative impact of the COVID-19 pandemic on the retail real estate industry contributed to the decline in InvenTrust’s estimated share value,” the REIT said in the letter. “Despite the 8 percent decline in our estimated share value, the portfolio strategy to own essential retail in markets with strong demographics remains intact. The values of grocery-anchored centers in the markets where we operate have likely help up better than almost all other retail property types according to industry experts.”
The REIT suspended its share repurchase program and distribution reinvestment plan in June, citing consequences stemming from the COVID-19 pandemic. The company noted at the time that the DRP suspension did not affect the payment of distributions to stockholders who previously received their distributions in cash.
InvenTrust indicated that many shareholders remained in the queue to have their shares repurchased following the suspension. However, it has since removed all shareholder accounts from the queue since it believes that, due to the new, lower NAV per share, it is “prudent” for shareholders to re-enroll in the future.
InvenTrust Properties, formerly known as Inland American Real Estate Trust, invests in grocery-anchored open-air centers in the Sun Belt region of the U.S. The offering launched in August 2005, became a self-managed REIT in 2014, and oversees a multi-billion-dollar portfolio of 65 retail properties, representing 10.8 million square feet of retail space, as of September 30, 2020.