Healthcare Trust Inc. Lowers its Monthly Distribution Rate
February 28, 2018 | Sue Hatfield-Green | Blue Vault
Effective March 1, 2018, shareholders of AR Global's Healthcare Trust REIT ("the company" or "the REIT") will receive $0.85 per share, down from the current $1.45 per share rate (annualized basis). This is a 6.76% to 3.96% distribution rate change based on the most recent $21.45 NAV per share.
The company stated that the move is intended to align distributions with its current cash flows, to reposition and increase the size of the portfolio, and better position the REIT for a future liquidity event.
Healthcare Trust, Inc., decreased distributions from $1.70 per share to $1.45 per share around the same time in 2017. Based on $25.00 per share, the decrease represented a distribution yield drop from 6.8% to 5.8%, and based on the 2015 NAV per share of $22.27, it was a change of 7.6% to 6.5%.
Also in 2017, to help reposition the portfolio, the REIT management signed leases with new, credit-worthy tenants and changed tenants and/or managers at 41 properties, which included replacing tenants in two skilled-nursing portfolios and operators of two senior-housing portfolios. Additionally, the company expects to improve property net operating income and compliance with debt covenants by acquiring primarily medical office buildings.
In the SEC 8-K filing on February 23, 2018, Healthcare Trust said that the performance of skilled-nursing facilities and senior-housing operating properties have been challenged by changes in reimbursement, increased supply, and other factors, which are similar to the experience of other healthcare REITs.
The REIT invests in multi-tenant medical office buildings and owned 166 properties comprising 8.6 million square feet in the portfolio, with a total purchase price of $2.4 billion, according to Blue Vault’s Q3 2017 NTR Review.
Healthcare Trust, Inc., is a publicly registered nontraded real estate investment trust sponsored by AR Global. The REIT's primary offering became effective in February 2013 and closed in November 2014, after raising $2.1 billion in investor equity. It continues to raise capital through its DRIP.