The board of 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 suspended distributions paid on the company’s Series A and Series 1 Preferred Stock until further notice, citing the potential economic disruption caused by the coronavirus (COVID-19).
The REIT, which is managed by MVP Realty Advisors, suspended distributions and share repurchases for holders of its common stock in 2018.
“While it is too early to fully realize the scope of the impact this pandemic will have on our portfolio, we anticipate a decline in parking revenues over the coming weeks, and potentially months, as major event cancellations and shelter-in-place orders take effect nationwide,” said the company in a letter to shareholders.
The Parking REIT indicated that unpaid preferred distributions will continue to accrue until they are declared by the board or otherwise paid following a liquidity event.
“Although we have been in discussions with some of our operator tenants regarding negotiating rent deferrals, our operator tenants may default on lease obligations within the portfolio,” the REIT added. “We also expect that the amount of percentage rents that we collect will be significantly reduced in the near- to medium-term as a result of the pandemic.”
The Parking REIT invests primarily in parking lots and garages in the United States and oversees a portfolio of 38 parking facilities purchased for approximately $309.9 million.
The REIT commenced operations in December 2015 and raised approximately $61.3 million in the initial public offering until closing in March 2017.
The company later launched a series of private placement offerings and sold $2.5 million in Series A Convertible Redeemable Preferred Stock and $36 million in Series 1 Convertible Redeemable Preferred Stock.