The board of Jones Lang LaSalle Income Property Trust Inc., an institutionally managed daily NAV REIT (NASDAQ: ZIPTAX; ZIPTMX; ZIPIAX; ZIPIMX), has approved a special dividend of $0.04 per share to stockholders of record as of September 27, 2019. The dividend, which stems from the sale of 111 Sutter Street in San Francisco, will be paid on November 1, 2019.
The board also approved a regular quarterly dividend of $0.135 per share, which is the 31st consecutive quarterly dividend issued to stockholders since the first quarter 2012.
Known as the Hunter-Dulin Building, 111 Sutter Street is a historic multi-tenant office building that was sold by the REIT in February for roughly $227 million. The property was sold for more than two times the initial acquisition cost.
The $0.04 per share special dividend allows the company to reduce certain state income taxes due from the capital gains on the sale of 111 Sutter Street.
“In keeping with our late cycle de-risking portfolio strategy,” said Allan Swaringen, president and CEO of JLL Income Property Trust, “the 111 Sutter sale earlier this year was strategic in terms of underweighting our portfolio allocation to higher beta markets and property types – in this case, San Francisco multi-tenant office properties.”
The company noted that the sale generated a $120 million taxable gain that was fully sheltered from federal taxation at the company level and should result in dividends paid throughout 2019 to be characterized as long-term capital gain, a reduced tax rate as compared to ordinary income tax rates for most stockholders. Certain states also assess REITs income taxes.
Swaringen added, “through this special dividend of approximately $6 million, along with other tax mitigation efforts, the company saved over $2 million from our initial state tax estimates. In these situations, which are fairly unique, we would rather pay cash to our stockholders in the form of special dividends than have the company incur taxes.”
On an annualized basis, the $0.135 regular quarterly dividend is equivalent to $0.54 per share and represents a yield of approximately 4.4 percent on a NAV per share of $12.21 as of August 7, 2019. All stockholders will receive $0.175 per share less applicable share class specific fees and the annualized yield will differ based on the share class.
Jones Lang LaSalle Income Property Trust owns and manages a $2 billion portfolio of 70 office, retail, industrial and apartment properties located primarily in the United States. Since 2012, the company has raised a total of approximately $1.9 billion through its ongoing public and various private offerings, as well as its distribution reinvestment plan.