American Realty Capital Healthcare Trust III Pays $15.75 Initial Liquidating Distribution
January 12, 2018 | James Sprow | Blue Vault
American Realty Capital Healthcare Trust III, Inc.’s filed an 8-K with the SEC on December 26, 2017 reporting that the board of directors of the Company unanimously approved an initial liquidating distribution of $15.75 per share of the Company’s common stock. The distribution was paid on January 5, 2018 to stockholders of record at the close of business on December 22, 2017. The distribution represented proceeds from the sale to Healthcare Trust, Inc. (“HTI”), pursuant to a purchase agreement dated as of June 16, 2017, of all the membership interests in the Company’s indirect subsidiaries that own the 19 properties comprising substantially all the Company’s assets. The closing of the asset sale occurred on December 22, 2017.
On July 18, 2017, the independent directors of the Board had unanimously approved an estimated per-share net asset value of common stock as of July 18, 2017 equal to $17.64, prepared by the Company’s Advisor, based on the range of net proceeds from the asset sale that might be available to distribute to shareholders. The board of directors approved an estimated NAV per share of $1.89 as of January 5, 2018, remaining after the initial liquidating distribution, which together with the $15.75 liquidating distribution is less than the updated estimated range of $17.67 to $17.81 filed in a proxy statement on October 23, 2017.
The REIT had suspended its distribution reinvestment program earlier in 2017 and terminated it officially as of January 5, 2018.
The REIT commenced its initial offering on August 20, 2014, and raised over $167 million, including DRIP proceeds. Common shares were initially sold at $25.00 per share. The REIT had been paying quarterly distributions at the rate of $6.25% annualized, based upon the initial price, which were suspended in August 2017, in light of the pending asset sale and plan of liquidation.
If the final estimated liquidating distribution were to be paid, the $17.64 total would represent a capital loss on the initial $25.00 offering price of over 29%. During the nine months ended September 30, 2017, cash distributions paid to stockholders totaled $5.8 million. Cash used to pay distributions was generated from cash flows from operations (61%) and available cash on hand, which included proceeds from the IPO (39%).
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