The board of Preferred Apartment Communities Inc. (NYSE: APTS), a publicly traded REIT and sponsor of alternative investments, has approved extending the closing dates of the company’s Series A Redeemable Preferred Stock and Warrant Offering and its Series M Redeemable Preferred Stock Offering.
The $500 million Series M offering was extended from December 2, 2018 to December 2, 2019, while the $1.5 billion Series A offering was extended from February 14, 2019 to February 14, 2020.
For the Series M offering, each mShare is sold at a public offering price of $1,000 with a minimum purchase of $5,000, although purchases of less than $5,000 may be made at the discretion of the dealer manager, Preferred Capital Securities LLC. Shares include a 3 percent dealer manager fee.
Cumulative cash dividends are paid at an initial annual rate of 5.75 percent. The dividend rate will increase by 0.25 percent per year beginning one year from the date of original issuance and on each subsequent one-year anniversary. The dividend rate will not exceed 7.5 percent per year, and the company pays dividends on the mShares monthly.
The Series A redeemable preferred stock and the warrants are sold in units, with each unit consisting of one share of Series A redeemable preferred stock for $1,000 per share, and one warrant to purchase 20 shares of APTS common stock at a price that is set at a 20 percent premium to the current price per share of the company’s common stock.
The $1000 per unit price includes a 7 percent selling commission and a 3 percent dealer manager fee. The company noted that if a participating broker-dealer reduces its selling commissions below 7 percent, the public offering price per unit will be decreased by an amount equal to the reduction.
The proceeds from both offerings are used by Preferred Apartment Communities to acquire multifamily properties and other real estate-related investments, including grocery-anchored shopping centers, and for general working capital purposes.
On Monday, shares of APTS common stock closed at $14.54.
Preferred Apartment Communities launched as a non-traded REIT in 2010 and began trading on the New York Stock Exchange the following year. The company was formed primarily to acquire and operate multifamily properties in select targeted markets throughout the United States. As a secondary strategy, it makes real estate loan investments in multifamily communities and other multifamily related assets, such as off-campus student housing communities. It also invests in other income-producing property types, such as grocery-anchored shopping centers and office properties.