Carter Validus Mission Critical REIT II Partially Suspends SRP
May 1, 2020
From an 8-K filing on May 1, 2020:
Partial Suspension of Share Repurchase Program
On April 30, 2020, due to the uncertainty surrounding the coronavirus (COVID-19) pandemic and any impact it may have on Carter Validus Mission Critical REIT II, Inc. (the “Company”), the board of directors (the “Board”) decided to temporarily suspend share repurchases under the Company’s share repurchase program, effective with repurchase requests that would otherwise be processed on the third quarter repurchase date, which is expected to be July 30, 2020. However, the Company will continue to process repurchases due to death in accordance with the terms of its share repurchase program. The Company will announce any updates concerning its share repurchase program in a Current Report on Form 8-K. Any unprocessed requests will automatically roll over to be considered for repurchase when the Company fully reopens its share repurchase program, unless a stockholder withdraws the request for repurchase 15 days prior to the next announced repurchase date.
Proration of Shares Repurchased in Second Quarter
As disclosed in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on October 4, 2019, the Board approved and adopted the Share Repurchase Program (the “SRP”), which applied beginning with repurchases made in January 2020. 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. Further, the Company limits the amount of distribution reinvestment plan (“DRIP”) proceeds used to fund share repurchases in each quarter to 25% of the amount of DRIP proceeds received during the previous calendar year. Valid repurchase requests are honored approximately 30 days following the end of the applicable quarter (the “Repurchase Date”). The Company limits the number of shares repurchased each quarter pursuant to the SRP as follows:
• on the first quarter Repurchase Date, the Company will not repurchase in excess of 1.25% 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 1.25% 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 1.25% 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 1.25% of the number of shares outstanding as of December 31 of the prior calendar year.
The Company determined that it reached the DRIP funding limitation for the 2020 second quarter Repurchase Date. Consequently, all repurchase requests will not be fully processed for such Repurchase Date. Therefore, properly submitted repurchase requests that the Company received by March 31, 2020, were repurchased in accordance with the SRP as follows (unless they were below the SRP’s account minimum threshold of $2,000, in which case they were repurchased in full): (i) first, pro rata as to repurchases upon the death or qualifying disability 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 8.25% of the shares made in the requests. All outstanding repurchase requests will automatically roll over to be considered for repurchase when the Company fully reopens its SRP, unless a stockholder or his or her estate, heir or beneficiary, as applicable, withdraws a repurchase request in whole or in part at any time up to 15 days prior to the next announced repurchase date.
Source: SEC
