The Parking REIT Inc., a publicly registered non-traded real estate investment trust formed by the December 2017 merger of MVP REIT and MVP REIT II, has sold a majority stake in the company to an affiliate of Bombe Asset Management LLC, a Cincinnati-based alternative asset management firm.
Bombe invested more than $125 million into The Parking REIT, comprised of $35 million in cash plus the contribution of parking assets and other property valued at more than $90 million, in exchange for operating partnership units valued at $11.75 per unit and warrants to purchase The Parking REIT common stock.
As part of the transaction, Bombe’s affiliate purchased 1.55 million shares of common stock of The Parking REIT at $11.75 per share from the REIT’s advisor and its affiliates, and CEO Michael Shustek.
The Parking REIT’s advisor also surrendered its claim to 400,000 shares of common stock due from The Parking REIT on December 31, 2021 and contributed 175,000 shares to a settlement fund.
“Proceeds from the purchase of the shares from the settlement fund will be used for the benefit of the company’s common stockholders,” The Parking REIT said. “The settlement fund was created as part of the settlement of three class action lawsuits in which The Parking REIT was named as a defendant.”
Shustek stepped down as a director and officer of The Parking REIT. Manuel Chavez will serve as The Parking REIT’s chairman and chief executive officer, and Stephanie Hogue will serve as president.
Earlier this month, the Securities and Exchange Commission charged Shustek with securities fraud, along with his investment advisory firm, Vestin Mortgage LLC. Shustek’s attorney, Manny Abascal of Latham & Watkins LLP, said that Shustek “looks forward to contesting these old and unfounded claims and clearing his name.”
The Parking REIT’s board elected Jeffrey Osher, Lorrence Kellar, Damon Jones, Danica Holley, Manuel Chavez, and Stephanie Hogue as new board members.
Osher is the founder and managing member of the hedge fund No Street Capital LLC. Kellar, formerly an executive with Kmart and Kroger, is member of the boards of Acadia Realty Trust and The Spar Group.
Jones serves as the chief communications officer at The Procter & Gamble Company, a position he has held since March 2020. Holley has served as Global Medical REIT’s chief operating officer since March 30, 2016. Shawn Nelson, a member of The Parking REIT board since 2017 and the independent committee that elected to move forward with the transaction, remains a member of board.
The company said that it plans to launch a tender offer to purchase up to 900,506 of The Parking REIT’s outstanding shares for $11.75 per share in cash.
The Parking REIT’s most recent net asset value per share was $25.10, as of May 15, 2019. In late December 2020, the REIT informed the Securities and Exchange Commission that it will further delay calculating its NAV per share, citing impacts of the global COVID-19 pandemic. Shares were originally sold for $25.00 each.
The Parking REIT invests primarily in parking lots and garages in the United States and owns a portfolio of 40 parking facilities located in 16 states. The company commenced operations in December 2015 and raised approximately $61.3 million in the initial public offering until closing in March 2017.