The board of Rich Uncles Real Estate Investment Trust I, a publicly registered non-traded REIT, has hired Cushman & Wakefield as its real estate financial advisor to evaluate strategic alternatives which will include marketing the REIT’s entire real estate properties portfolio for disposition by sale, merger or other transaction structure.
In addition, the REIT also reported a $10.57 net asset value per share as of December 31, 2018, a decline from its previous NAV of $10.66 per share.
“While the company’s real estate portfolio value remained comparable to the prior year, a decrease in our cash balances resulted in…an approximately 1 percent decrease in the NAV,” said CEO Aaron Halfacre. “The cash decrease was primarily due to funding our share repurchase program and other cash needs. We will continue our efforts to deliver dividends and also to maximize the value of the portfolio through active management.”
Rich Uncles REIT I, which reported total investments in real estate properties of $140 million as of September 30, 2018, said that it believes now is an opportune time to explore the disposition of its portfolio.
If an acceptable buyer and price are identified, a portfolio sale or other transaction would be subject to approval of the board and company shareholders. Depending on the results of the marketing process, the REIT believes a shareholders’ meeting to approve a potential transaction could occur as early as the second quarter of 2019.
In connection with the strategic alternatives review, one of the independent members of the board has resigned and the three remaining independent members, who are also independent directors of affiliated Rich Uncles NNN REIT Inc. (RW Holdings NNN REIT Inc.), have resigned from the NNN board, effective upon the appointment of their successors. As a result of these resignations, the company noted that there will no longer be an overlap of the independent board members of the two REITs.
Lastly, the company has suspended the redemptions of common stock under its share repurchase program during the strategic alternatives review process.
Rich Uncles REIT I invests primarily in single tenant income-producing corporate properties which are leased to creditworthy tenants under long-term net leases. Through October 31, 2018, the company had raised approximately $94.2 million in investor equity.
The REIT’s portfolio includes 21 properties, with four office properties representing 34 percent of the portfolio’s net operating income, 11 retail properties representing 33 percent, and six industrial properties representing 33 percent. The portfolio is concentrated in California, with 18 properties generating approximately 90 percent of its net operating income. The company also has two retail properties in Texas and one in Georgia. Investment grade tenants represent 70 percent of the portfolio’s net operating income.