Carter Validus Mission Critical REIT Reached 2% Limit in Q1 2019 SRP
January 11, 2019 | James Sprow | Blue Vault
According to the REIT’s Second Amended and Restated Share Repurchase Program (the “Amended & Restated SRP”), which became effective January 1, 2019, Carter Validus Mission Critical REIT, Inc. either accepts or rejects a repurchase request by the first day of each quarter, and processes accepted repurchase requests on or about the tenth day of such quarter.
The Company limits the number of shares repurchased each quarter pursuant to the Amended & Restated SRP as follows:
|•||on the first quarter Repurchase Date, the Company will not repurchase in excess of 2.0% of the number of shares outstanding as of December 31 of the prior calendar year;|
|•||on the second quarter Repurchase Date, the Company will not repurchase in excess of 1.0% of the number of shares outstanding as of December 31 of the prior calendar year;|
|•||on the third quarter Repurchase Date, the Company will not repurchase in excess of 1.0% of the number of shares outstanding as of December 31 of the prior calendar year; and|
|•||on the fourth quarter Repurchase Date, the Company will not repurchase in excess of 1.0% of the number of shares outstanding as of December 31 of the prior calendar year.|
Each quarter, the Company will process repurchase requests made in connection with the death or qualifying disability of a stockholder, or, in the discretion of the Board, an involuntary exigent circumstance, such as bankruptcy, prior to processing any other repurchase requests. During any calendar year, the Company will not repurchase in excess of 5.0% of the number of shares outstanding on December 31st of the previous calendar year (the “5.0% Annual Limitation”).
The Company determined that it reached the share limitation for the 2019 first quarter Repurchase Date, and that it will not be able to fully process all repurchase requests for such Repurchase Date. Therefore, for properly submitted repurchase requests that the Company received by December 24, 2018, shares were repurchased in accordance with the Amended & Restated SRP as follows: (i) first, pro rata as to repurchases upon the death of a stockholder; (ii) next, pro rata as to repurchases to stockholders who demonstrated, in the discretion of the Board, another involuntary exigent circumstance, such as bankruptcy; (iii) next, pro rata as to repurchases to stockholders subject to a mandatory distribution requirement under such stockholder’s IRA; and (iv) finally, pro rata as to all other repurchase requests. Repurchases of shares received by the Company during the prorated period within categories (i) and (ii) above were repurchased in full. There were no repurchases of shares received by the Company within category (iii) above. Repurchase of shares received by the Company within category (iv) above were repurchased based on a proration of approximately 49.5% of the shares made in the requests.
All outstanding repurchase requests will automatically roll over to the 2019 second quarter Repurchase Date and priority will be given to the repurchase requests as provided above. A stockholder or his or her estate, heir or beneficiary, as applicable, may withdraw a repurchase request in whole or in part at any time up to five business days prior to the next quarter Repurchase Date.
On September 27, 2018, the Company’s board of directors established an updated estimated per share NAV, calculated as of June 30, 2018, of $5.33. On December 20, 2018, the board of directors approved and authorized a daily distribution to the Company’s stockholders of record as of the close of business on each day of the period commencing on January 1, 2019, and ending on January 31, 2019. The distributions will be calculated based on 365 days in the calendar year and will be equal to $0.000876712 per share of common stock, which will be equal to an annualized distribution rate of 6.0%, based on the Company’s estimated per share net asset value of $5.33. The distributions declared for the record dates in January 2019 will be paid in February 2019.
According to the Amended & Restated SRP, shares will be repurchased at a price equal to the most recent estimated net asset value per share as determined by the Board, and adjusted for any special distributions. During the nine months ended September 30, 2018, the Company received valid repurchase requests related to approximately 10,061,000 shares, of which approximately 9,309,000 shares of common stock were repurchased for an aggregate purchase price of approximately $64,212,000 (an average of $6.90 per share).
The time (at Blue Vault's 2nd Annual Broker Dealer Educational Summit) proved extremely informative.