Steadfast Apartment REIT Inc., a publicly registered non-traded real estate investment trust, has lowered its distribution rate and amended its share repurchase plan to limit repurchase requests to death or qualifying disability only, according to a letter to shareholders.
Beginning February 1, the annualized distribution payment for a share of common stock will be $0.5250, a decrease from the annualized distribution payment of $0.90 per share that has historically been paid. The change will be reflected in the distribution payment made in early March for the month of February. The REIT’s board believes that “it is prudent to reduce the distribution payment to ensure sufficient liquidity.”
The company also amended its share repurchase plan to instances of death and qualifying disability. This change will be in effect on the next repurchase date at the end of April 2021. The company noted that share repurchase requests that don’t meet the requirements of death or qualifying disability will be cancelled (including redemption requests received in the first quarter of 2021). Death and disability requests will be limited to $3 million per quarter.
“These changes are being made after careful consideration by our board of directors and are not made lightly,” the company stated in the letter. “Our board of directors will continue to evaluate our distribution payments and repurchase plan as circumstances change. We understand that these measures could have an economic impact on our investors. However, we believe that these changes are prudent given the current circumstances and are in the best interest of the long-run financial success of the company.”
Steadfast Apartment REIT invests in apartment communities in targeted markets throughout the United States that have demonstrated high occupancy and income levels across market cycles. The REIT owns and/or manages a $3.4 billion portfolio of 70 apartment communities in 14 states. In March 2020, Steadfast Apartment REIT completed its mergers with affiliated non-traded REITs, Steadfast Income REIT Inc. and Steadfast Apartment REIT III Inc. The post-merger entity had a net asset value per share of $15.23, as of March 6, 2020.