RealSource Properties Inc. REIT, a private non-traded real estate investment trust announced that it increased its net asset value to $13.96 from $12.00.
The updated valuation represents an increase of $1.96 or 16.3% from its prior valuation. The fund originally launched at $10.00 per share with a targeted annualized distribution of $0.625 per share.
The company noted that, “in an effort to contain costs during the early life of the REIT,” it does not rely on an independent third-party valuation firm to assist in its internal calculation of its net asset value.
The REIT, launched in March 2022, currently owns a portfolio of properties valued at $430 million with a fund target of $500 million.
According to the company, the intent of the fund is to be a perpetual offering when the initial raise reaches $500 million. Currently, the fund does not have a stated exit strategy but has incorporated significant liquidity options after the first year of an investor’s initial investment. The fund has a “long-term investment horizon.”
As of Oct. 31, 2022, the investor equity of the aggregate portfolio is approximately $260 million. It is a perpetual fund with no maximum on the amount raised.
The company says it implements a value-add strategy, focusing on geographically diverse Class B/B+ properties that offer potential upside value. Their properties are in secondary metropolitan areas demonstrating “solid fundamentals and growth.”
The RealSource Properties REIT currently contains eleven properties comprised of 3,125 units under management across the United States. Last month, RealSource announced a distribution increase to $0.650 from $0.625 per share annually.
“RealSource’s fund performance demonstrates our ability to acquire well-chosen, thoroughly vetted assets, using our data to enhance our decision-making,” Nate Hanks, chief executive officer of RealSource Properties. “The REIT’s positive performance validates our commitment to increasing fund value while providing a potential hedge against inflation, and a continued goal to preserve and grow capital.”
RealSource Properties is a commercial real estate investment manager, and since its 2002 launch, has acquired 46 properties at an aggregate purchase price of nearly $1 billion.