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 its share repurchase program, citing the negative impact of the coronavirus (COVID-19) pandemic on its portfolio. The company indicated that the suspension will be temporary.
The suspension affects repurchase requests that would otherwise be processed in April 2020, however, the REIT will continue to process repurchases due to the death of a shareholder in accordance with the terms of its SRP.
The company said that once the SRP fully reopens, any unprocessed requests will automatically roll over unless a stockholder withdraws the request five business days before to the next repurchase date.
“We are taking the ongoing coronavirus (COVID-19) pandemic extremely seriously and are proactively taking steps to attempt to address the corresponding operational threats to our hotel properties in an effort to minimize the impact of COVID-19 on the our financial results and to position the company to rebound as quickly as possible once the situation has stabilized,” the company said in a filing with the Securities and Exchange Commission.
The REIT intends to pay quarterly distributions for the first quarter of 2020 with operating cash flow, however, the board will make determinations on future distributions on a quarter-by-quarter basis. The company said that distributions will continue to accrue in accordance with its charter.
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.