Procaccianti Hotel REIT Suspends Offering and Distribution Reinvestment Plan
The board of Procaccianti Hotel REIT Inc., a publicly registered non-traded real estate investment trust sponsored by privately-held real estate firm Procaccianti Companies Inc., has suspended the company’s public offering and distribution reinvestment plan in light of the coronavirus (COVID-19) pandemic.
The board of Procaccianti Hotel REIT Inc., a publicly registered non-traded real estate investment trust sponsored by privately-held real estate firm Procaccianti Companies Inc., has suspended the company’s public offering and distribution reinvestment plan in light of the coronavirus (COVID-19) pandemic. The company suggested the suspensions will be temporary.
The suspension of the offering went into effect yesterday, while the distribution reinvestment plan suspension is effective as of April 17, 2020.
“The board made this difficult decision because it does not believe it is appropriate for the company to continue to sell shares of common stock until it has determined an updated net asset value per share,” Procaccianti Hotel REIT said in a letter to shareholders. “The company expects to release an updated NAV per share of all classes of its capital stock calculated as of March 31, 2020 when available, which it expects to be lower than the current NAV per share.”
Late last month, the REIT suspended its share repurchase program, also citing the negative impact of the coronavirus pandemic on its portfolio. Repurchase requests due to the death of a shareholder will continue to be processed.
“While it is impossible to predict when the company will be able to return to normal operations during these uncertain times, the board and the company’s management will continue to evaluate the company’s financial condition and the overall economic environment in order to determine an appropriate time to recommence sales of shares in the…offering and pursuant to the DRIP and fully reinstate the share repurchase program,” the REIT added.
Procaccianti Hotel REIT’s $550 million initial public offering launched in August 2018 to invest in hospitality properties consisting primarily of select-service, extended-stay, and compact full-service hotel properties throughout the United States. The company owned interests in three select-service hotels located in three states with a total of 346 rooms, as of September 30, 2019. As of March 16, 2020, the company had raised $44.3 million in investor equity via its private and public offerings.
