RREEF Property Trust Posts 1.8% NAV Per Share Decline in May 2020

June 11, 2020

RREEF Property Trust Inc. (NASDAQ: ZRPTAX; ZRPTIX; ZRPTTX), a publicly registered daily NAV REIT advised by DWS Group, has provided a pandemic-related property portfolio and valuation update in a filing with the Securities and Exchange Commission.

During May 2020, the REIT’s NAV per share decreased approximately 1.8 percent for each share class.

Class A shares had an NAV per share of $14.15 on May 1 and were valued at $13.93 on May 29.

Class I shares had an NAV per share of $14.23 at the beginning of May and closed the month at $14.01.

Class T shares had an NAV per share of $14.18 at the beginning of May and closed the month at $13.96.

Class D shares had an NAV per share of $14.21 at the beginning of May and closed the month at $13.99.

The company said that the decrease was primarily the result of declines in property values, while its real estate equity securities portfolio remained stable. The REIT indicated that the values of most of its properties have been adjusted downward between late March 2020 and May 2020, resulting in a decline of approximately 1 percent for May 2020.

“These valuation changes were driven by changing property cash flows based on our collections, increased projected credit losses, extended lease-up times for currently vacant spaces, increased discount rates and reduced market rent growth rates,” the company said.

The REIT’s property portfolio is diversified across the office, industrial, retail and apartment sectors. The retail properties owned by the REIT are grocery-anchored and contain a number of tenants that are considered essential, the company said.

For the month of April 2020, approximately 93 percent of rental revenues were collected for the entire property portfolio.

Office – 93 percent occupied and 96 percent collected
Industrial – 100 percent occupied and 100 percent collected
Retail – 99 percent occupied and 80 percent collected
Apartment – 100 percent occupied and 99 percent collected

For the month of May 2020, approximately 91 percent of rental revenues were collected for the entire property portfolio.

Office – 93 percent occupied and 96 percent collected
Industrial – 100 percent occupied and 100 percent collected
Retail – 99 percent occupied and 73 percent collected
Apartment – 100 percent occupied and 98 percent collected

The company also provided a leasing update for two properties in its portfolio. In April 2020, the REIT executed a lease extension with Allstate in its Heritage Parkway property, extending its lease maturity from November 2020 to May 2026, increasing the weighted average remaining lease term for its commercial properties to 5.3 years as of May 31, 2020.

The Flats at Carrs Hill, a student housing property located near the University of Georgia campus in Athens, Georgia, was 94 percent pre-leased, as of May 29, 2020, for the next school year that begins in August 2020, and at higher average rents than those currently in place, the company said.

With respect to commercial and residential tenants who have been affected by COVID-19 and who did not pay rent, the company said that it continues to work to recoup rent and bring their leases current.

RREEF Property Trust commenced its $2.5 billion initial public offering in January 2013 and a $2.3 billion follow-on offering in July 2016. In June 2019, the company filed a registration statement for a second follow-on offering of $2.3 billion shares of common stock.

As of March 31, 2020, the REIT owned 14 properties, including one medical office property and one student housing property, totaling $328.8 million. Its real estate equity securities portfolio consisted of publicly traded common stock of 33 REITs with a value of $16.5 million.

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