Mackenzie Realty Capital Inc., a non-traded real estate investment trust, has reinstated its regular quarterly distribution at the rate of $0.05 per share, which the company said was “more than supported” by cash flow from operations for the quarter ended March 31, 2021, according to a recent letter to shareholders. The dividend is payable to shareholders of record as of May 15, 2021.
The company suspended distributions in March 2020, citing “numerous factors relating to the global COVID-19 pandemic.”
“We anticipate continued recovery in the performance of our portfolio and believe that we may be able to increase our dividend rate in the future,” said Robert E. Dixon, Mackenzie president, in the letter.
In addition, the company anticipates making future dividends, if any, within 30 days after the close of the previous fiscal quarter.
Last month, Mackenzie 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.
Discussing the preferred stock offering, Dixon added, “We are excited about the opportunities that our next capital raise will provide, including, for example, being able to take control of a portfolio company by replacing certain high interest rate obligations with equity from us, which should support further increases in cash flow available to pay common and preferred stock dividends.”
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 plans to 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 indicated that during the first quarter of 2021, it focused on consolidating its previously existing investments and made two new investments in multifamily properties in Oakland, California.
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.