Lightstone Value Real Estate Investment Trust Reactivates DRIP
October 17, 2018 | James Sprow | Blue Vault
On October 16, 2018, Lightstone Value Real Estate Investment Trust, Inc. mailed a prospectus related to its amended and restated distribution reinvestment program (the “DRIP”) to its existing stockholders. The DRIP, which had been suspended since 2015, will be reactivated as amended and restated effective on October 25, 2018.
Pursuant to the DRIP following its reactivation, the Company’s stockholders who elect to participate may invest all or a portion of the cash distributions that the Company pays them on shares of the Company’s common stock in additional shares of the Company’s common stock without paying any fees or commissions. The purchase price for shares under the DRIP will be equal to 95% of the Company’s current estimated per-share net asset value (“Estimated Per-Share NAV”), as determined by the Company’s board of directors and reported by the Company from time to time, and will therefore initially be $11.11 per share, based on the Estimated Per-Share NAV of $11.69 as of September 30, 2017 published on December 11, 2017.
As of June 30, 2018, on a collective basis, the Company wholly or majority owned and consolidated the operating results and financial condition of 2 retail properties containing a total of approximately 0.5 million square feet of retail space, 10 industrial properties containing a total of approximately 0.5 million square feet of industrial space and one multi-family residential property containing a total of 199 units. All of the Company’s properties are located within the United States.
According to the Q2 2018 Blue Vault NTR Industry Review, the REIT’s return on assets was 5.42% over the last 12 months, below the median ROA for all nontraded REITs for the previous four quarters of 6.16%. It had a negative leverage contribution with its average cost of debt at 5.51% and 28.6% debt ratio. About 37.6% of the REIT’s debt matures prior to 2020 and 24.2% is at unhedged variable rates, indicating significant refinancing need and interest rate risk. Its year-to-date interest coverage ratio at 3.8X was above the 2.0X benchmark. Since inception the REIT has paid out 78% of MFFO in cash distributions excluding DRIP, and this rate was 120% for the last four quarters, higher due to the suspension of the DRIP in 2015.
Sources: SEC, Blue Vault
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