RREEF Property Trust Provides Portfolio Update, Monthly NAV Per Share Decreases
RREEF Property Trust Inc., a publicly registered daily net asset value real estate investment trust advised by DWS Group, filed a portfolio with the Securities and Exchange Commission and reported an updated daily net asset value per share of its common stock for June 2023.
RREEF says RPT Flats at Carrs Hill LLC, a Delaware limited liability company and their indirect wholly-owned subsidiary, as borrower, entered into a loan agreement, providing for a $25.5 million, non-recourse loan from Nationwide Life Insurance Company which is secured by their student housing property, The Flats at Carrs Hill.
The interest rate for the new loan is fixed at 5.51% with interest-only payments for the entire seven-year term and the maturity date is July 1, 2030, with no extension options.
RREEF says proceeds of the new loan were used to fully repay and release the existing $14.5 million mortgage loan on the property with the remaining proceeds being used to pay down the outstanding balance on their existing line of credit with Wells Fargo Bank. In connection with origination of the new loan and release of the prior loan, we incurred approximately $436,000 of costs.
On June 26, 2023, RREEF announced that the company also sold a 64,217 rentable square-foot Class A medical office building located in Dedham, Massachusetts, Allied Drive. Allied Drive was sold to Remedy Properties Inc. for $41.9 million. The company originally purchased Allied Drive on September 27, 2016, for a gross purchase price of $34.0 million, exclusive of closing costs. RREEF says the sale proceeds were used to pay down their existing line of credit with Wells Fargo Bank.
The company says their portfolio remains 97% leased with four years of weighted-average lease term for their commercial properties as of June 30, 2023.
“Since the beginning of 2022, we believe we have reduced risk in our portfolio while maintaining positioning we believe will capitalize on near and long-term secular growth drivers,” says RREEF. “Notably, through June 2023, we renewed approximately 30% of our commercial leases in addition to leasing up two office vacancies and reducing 2023 lease rollover to just 1.0% of our net rentable area, with little rollover for 2024 at 5.4% of net rentable area. With respect to the aforementioned lease renewals, overall monthly base rental revenue for these leases is approximately 7.2% higher than the expiring lease rates.”
After the sale of Allied Drive, based on March 31, 2023 values, RREEF decreased their allocation to the office sector to 10%. Their diversified portfolio remains allocated, at 67%, to their highest-conviction sectors, industrial and residential. The remainder of the portfolio, 23% after the sale of Allied Drive, is invested in the retail sector, where they own primarily necessity-based, grocery-anchored assets.
The company’s shares for the month of June 2023 are below.
Class A shares had an NAV per share of $14.57 on May 31 and $14.34 on June 30.
Class I shares had an NAV per share of $14.66 on May 31 and $14.43 on June 30.
Class T shares had an NAV per share of $14.69 on May 31 and $14.47 on June 30.
Class D shares had an NAV per share of $14.67 on May 31 and $14.45 on June 30.
Class M-I shares had an NAV per share of $14.57 on May 31 and $14.35 on June 30.
Class T2 shares had an NAV per share of $14.52 on May 31 and $14.29 on June 30.
Class N shares had an NAV per share of $14.58 on May 31 and $14.35 on June 30.
Class A and Class T shares are available to the general public and Class I are available through fee-based programs and to institutional investors. Class D shares are currently being offered through a private placement offering while Class N shares are not available for purchase except through the REIT’s distribution reinvestment plan.
RREEF Property Trust invests primarily in income-producing commercial real estate located in the United States, including office, industrial, retail and apartment properties. The REIT also invests in the common and preferred stock of REITs and other real estate companies and debt investments backed principally by real estate.
As of March 31, 2023, RREEF Property Trust’s real estate portfolio included 15 properties valued at $599.7 million, while its real estate securities portfolio was valued at $26.9 million and a CMBS real estate loan investment held a net fair value of $31.2 million. The company has conducted a series of public and private offerings since January 2013. The company has raised $376.8 million in investor equity via its public offerings, as of May 19, 2023.
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