Steadfast Apartment REIT III Inc., a publicly registered non-traded real estate investment trust, has approved an estimated value per share of the company’s common stock of $22.54 as of June 30, 2018. Shares were originally sold for $25.00 each.
Its initial public offering, which was declared effective on February 5, 2016, offered up to $1 billion shares of common stock and $300 million in distribution reinvestment plan shares. At closing on September 30, 2018, the company had raised $203.6 million in investor equity, including $6.1 million in DRIP shares.
“We believe this estimated value per share reflects one of the non-traded REIT industry’s best valuations relative to initial share offering price in the shortest time since escrow break,” said Ella Neyland, president of Steadfast Apartment REIT III. “We feel this highlights the successful execution of our strategy of enhancing value wisely to provide luxury-style living for mid-tier prices.”
The estimated value per share was determined by STAR III’s board of directors after independent, third-party firms conducted property-level and aggregate valuation analyses on the company’s 10 apartment community properties plus cash and other assets, less the estimated value of outstanding mortgage debt and other liabilities, divided by the number of shares issued and outstanding on an adjusted fully diluted basis.
The REIT conducted its valuation in accordance with guidelines issued by the Institute of Portfolio Alternatives, formerly the Investment Program Association. STAR III had previously been utilizing the net investment methodology that is available to REITs during the two and one-half years after breaking escrow in an initial public offering.
Under that method, the estimated value per share that shareholders saw on their statements was between $22.25 and $22.28, depending on which share class they were invested in.
As reported by the DI Wire last month, Stira Capital Markets Group, the capital markets division of Steadfast Companies, laid off multiple employees and exited the non-traded direct investment space for the foreseeable future, according to an industry source close to the matter. At the time, the source said that the division “planned to keep some staff and may pursue offerings in the future.”
Steadfast Apartment REIT III was formed to acquire and operate a portfolio of institutional-quality multifamily and senior-living apartment communities in targeted markets throughout the United States that have demonstrated high occupancy and income levels across market cycles. The company’s $400 million portfolio is comprised of 10 multifamily properties.