MacKenzie Realty Capital, a publicly registered non-traded business development company, has launched an unsolicited tender offer to purchase up to one million shares of Carter Validus Mission Critical REIT Inc. for $3.16 each. The offer expires on May 31, 2019.
Carter Validus Mission Critical REIT, a publicly registered non-traded real estate investment trust, recently announced plans to merge with Carter Validus Mission Critical REIT II in a stock and cash transaction, potentially creating an entity valued at approximately $3.2 billion. If approved, the transaction is expected to close in the second half of 2019.
Carter Validus Mission Critical REIT’s most recent NAV per share is $5.33 as of June 30, 2018. The previously declared NAV per share was $9.26, which was later updated to $6.26 per share in connection with a $3.00 per share special cash distribution paid on March 16, 2018.
Shares originally sold for $10.00 each and early investors who purchased on April 28, 2011 have received total distributions of approximately $8.00 per share.
In January 2019, the REIT amended its share repurchase program to limit the number of shares repurchased on a quarterly, rather than monthly basis. For the first quarter of 2019, the company limited repurchases to no more that 2 percent of the shares outstanding as of the last day of 2018. For the remaining three quarters of the year, the quarterly limit is 1 percent. The DI Wire previously reported that the REIT had reached its 2 percent share repurchase limit for the first quarter of 2019 and would not be able to fully process all requests.
In a letter to Carter Validus REIT shareholders, MacKenzie said, “The limitations for first and second quarters of 2019 were reached and not all requests received for those periods were or will be processed. The repurchase program is now limited to requests in connection with the death, qualifying disability, or involuntary exigent circumstances of a stockholder. Thus, it could be difficult for investors to sell any or all their shares in the repurchase program.”
MacKenzie and its affiliates currently own 155,015 REIT shares, or 0.09 percent of those outstanding.
Carter Validus Mission Critical REIT owns a $1.2 billion portfolio comprised of 61 healthcare properties, as of March 2019. The company’s offering was declared effective by the SEC in December 2010 and closed in June 2014 after raising more than $1.7 billion in investor equity, according to Summit Investment Research.
Based in Moraga, California, MacKenzie has specialized in the area of discounted real estate securities and asset management since its formation in 1982.