Advisor Pays Fees in Strategic Student & Senior Housing Trust’s Updated Public Offering
August 13, 2019 | James Sprow | Blue Vault
Blue Vault’s August 13 article about Strategic Student & Senior Housing Trust addressed the nontraded REIT’s strategy of focusing on two unique sectors that benefit from demographic trends. It’s important to state that the REIT has recently modified its public offering. The updated prospectus was declared effective on July 10.
As of June 21, 2019, the REIT ceased offering Class A shares, Class T shares, and Class W shares in its primary offering. Commencing July 10, 2019, they are offering Class Y shares and Class Z shares at a price of $9.30 per share.
According to the prospectus:
All investors may purchase Class Y shares in the offering, while Class Z shares are only available to certain categories of investors, as described in this prospectus, such as investors purchasing through certain fee-based programs or registered investment advisers. The share classes have differing sales commissions; there is an ongoing stockholder servicing fee with respect to Class Y shares and there is an ongoing dealer manager servicing fee with respect to Class Z shares.
It’s important to note that the REIT’s advisor will be paying the upfront loads for the Class Y shares and the organizational and offering expenses for the Class Z shares. Here’s the prospectus language:
Our advisor will be responsible for paying the sales commissions, dealer manager fees and organizational and offering expenses related to the sale of our Class Y shares and the organizational and offering expenses related to the sale of our Class Z shares, without reimbursement by us. We will not use any of our offering proceeds to pay such expenses; provided, however, that pursuant to our advisor funding agreement, our advisor may cease paying the sales commissions, dealer manager fees and organizational and offering expenses related to the sale of our Class Y shares and Class Z shares in its sole discretion on the date we raise $250 million in gross offering proceeds from the sale of Class Y shares in our primary offering.
The net proceeds to the REIT for each share sold for each share class are the $9.30 offering prices. The advisor is paying $0.56 per share in the upfront loads for Class Y shares, consisting of $0.28 in sales commissions and $0.28 in dealer manager fees per share.
Source: SEC 424B3 filed 7-10-2019
