MacKenzie Launches Tender Offer for Summit Healthcare REIT Shares

MacKenzie Realty Capital Inc., a publicly registered non-traded business development company, has commenced an unsolicited tender offer to purchase 900,000 shares of Summit Healthcare REIT common stock.

MacKenzie Realty Capital Inc., a publicly registered non-traded business development company, has commenced an unsolicited tender offer to purchase 900,000 shares of Summit Healthcare REIT common stock for $1.42 each. The offer, which expires on February 28, 2018, constitutes 3.9 percent of the outstanding shares.

Summit Healthcare REIT is a non-traded real estate investment trust that invests in assisted living, memory care and skilled nursing facilities. The company’s most recent net asset value per share is $2.53.

MacKenzie currently owns approximately 1.4 million shares of the REIT, or 5.9 percent of those outstanding, and would pay nearly $1.3 million if all shares in the current offer are tendered.

Summit Healthcare’s board is urging shareholders to reject the offer, believing that it is not in their best due to its “very low price,” which is an approximately 44 percent discount to the REIT’s NAV per share.

Summit Healthcare closed its offering in November 2010 after raising $172 million in investor equity, and as of the third quarter of 2017, manages a portfolio of 10 properties with a total investment cost of $161.3 million, according to unaffiliated research firm Summit Investment Research.

In other MacKenzie news, The DI Wire reported earlier this week that the company declared a $0.075 per share special distribution to shareholders, in addition to its regular quarterly distribution.

MacKenzie Realty Capital launched in August 2013 and has raised $71 million in investor equity, as of the third quarter of 2017. The company’s portfolio includes 59 investments totaling $59 million, according to Summit Investment Research.

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