Realty Finance Trust Declares Net Asset Value
The board of Realty Finance Trust, Inc., a publicly registered non-traded real estate investment trust, unanimously approved and established an estimated net asset value of $20.05 per share of the company’s common stock. The REIT appointed Benefit Street Partners as its new advisor at the end of September, replacing AR Global Investments – formerly AR Capital.
The NAV is based on the value of the company’s assets less its liabilities and was performed in accordance with valuation guidelines issued by the Investment Program Association. The company engaged Duff & Phelps LLC, an independent third-party real estate advisory firm, to estimate the fair value of the company’s commercial real estate debt investments and commercial mortgage backed securities.
Duff & Phelps estimated that the CRE debt investments had a value range between $1.08 billion and $1.14 billion. Duff & Phelps estimated that the CMBS investments had a value range between $57 million and $58.7 million. The company’s cash and other assets totaled $72.5 million, while its liabilities totaled $614.1 million.
By applying the low, midpoint and high range of market rates determined by Duff & Phelps, the resulting estimated per share NAV range is $18.96 to $20.89. The midpoint is $20.05. The board unanimously determined to change the purchase price for shares issued under the company’s distribution reinvestment plan to $20.05 per share. Shares were originally sold for $25.00.
Realty Finance Trust focuses on commercial real estate debt investments secured by income-producing properties and targets loans and securities – diversified by duration, geographic location, property type, ownership, and tenancy. The REIT commenced operations in November 2012 and raised $786 million in investor equity prior to terminating the offering in January 2016. As of September 30, 2016, the REIT’s portfolio consisted of 73 loans and 7 CMBS investments.
