Mackenzie Realty Capital Inc., a non-traded real estate investment trust, has increased its regular quarterly distribution from $0.05 per share to $0.06 per share. The distribution is payable to shareholders of record as of July 9, 2021.
In a letter to shareholders filed with the Securities and Exchange Commission, the company said that the distribution was “more than supported” by cash flow from operations for the second quarter of 2021. The company anticipates continued recovery in the performance of its portfolio and believe that it may be able to continue to increase its dividend rate in the future.
MacKenzie Realty Capital was formerly a non-traded business development company that was taxed as a real estate investment trust. It officially withdrew its BDC designation earlier this year to focus solely on real asset investments instead of securities investments. MacKenzie previously purchased shares of illiquid securities, such as non-traded REITs, directly from investors in unsolicited tender offers at prices lower than the estimated net asset value per share.
In May 2020, MacKenzie suspended its share repurchase program to focus on retaining cash to purchase real estate.
In the shareholder letter, Mackenzie said that “many shareholders are concerned about liquidity options in general, and our redemption plans specifically.”
The company said that it can relaunch share redemptions once there are sufficient funds in the DRIP since the dividend reinvestment program funds the share redemption program. It plans to address the issue again later this year.
MacKenzie noted that it is under contract to sell the Bishop Berkeley apartment complex for $10.25 million, when it was valued for $7.8 million as of December 31, 2020, and it was purchased for $7.5 million in 2019. The transaction is expected to close within 60 days.
The REIT also sold the 5210 Fountaingate multifamily property, which should result in an approximate 15 percent internal rate of return since 2016, the company said.
MacKenzie launched its initial public offering in August 2013 and as of December 31, 2020, had raised approximately $130.3 million from its public offerings and dividend reinvestment plan.
The company filed an offering circular for the sale of a newly created class of preferred stock. According to the Regulation A filing, it plans to offer 2 million shares at $25.00 each for a total of $50 million.