Cottonwood Communities Reports Monthly NAV Per Share of $11.79
July 27, 2021 | James Sprow | Blue Vault
Cottonwood Communities, Inc. (“Cottonwood Communities”), a publicly registered non-traded real estate investment trust (“REIT”), has updated its monthly net asset value (“NAV”) per share/unit to $11.79 for its classes of common stock and its operating partnership units, as of June 30, 20211. The previous month, the common stock and operating partnership units had an NAV of $10.85. The latest NAV represents an increase of 8.66%.
The NAV per share/unit is based on the estimated value of the company’s assets, less the estimated value of its liabilities divided by the number of fully diluted shares/units outstanding. Altus Group U.S. Inc., a third-party firm, assisted with the valuation process.
Cottonwood Communities is a non-traded REIT that seeks to invest in multifamily apartment communities and multifamily real estate related assets located throughout the United States. As of June 30, 2021, the REIT owned thirty-five multifamily apartment communities across the country. It had also issued a mezzanine loan on a multifamily development project in Reno, Nevada; and had made preferred equity investments in three multifamily development projects in Ybor City, Florida, Queens, New York, and West Sacramento, California.
On May 7, 2021, Cottonwood Communities completed the previously announced merger with Cottonwood Residential II Inc. and its operating partnership Cottonwood Residential O.P. LP. The combined company, Cottonwood Communities, Inc. has $1.6 billion invested in 35 apartment communities and other real estate-related assets located in growth markets across 12 U.S. metropolitan areas. Cottonwood Residential II stockholders received 2.015 shares of Cottonwood Communities common stock. The net asset value of $11.79 per share is the third net asset value announced by the combined company.
In the latest Blue Vault report for Q1 2021, Cottonwood Communities was paying a quarterly distribution on its Class A and Class T shares equal to 5.00% annualized based upon the original $10.00 per share offering price.
Cottonwood Communities’ investment strategy includes a target investment allocation of approximately 65% in stabilized, income producing properties with stabilized occupancies and rents. Approximately 35% is in preferred equity investments, mortgage or mezzanine loans, and/or equity investments in property/land to be developed into a multifamily apartment community.
The Company had registered a $750 million offering of common stock in its IPO. Also, in November 2019, it launched a Private Offering, a private placement offering exempt from registration under the Securities Act for which it initially offered up to $50 million in shares of 2019 Preferred Stock to accredited investors. On March 23, 2021, the REIT’s board of directors approved an increase in the size of the offering to $100 million. According to monthly reports to Blue Vault, the REIT has issued over $30 million of the 2019 Preferred Stock in the first six months of 2021 and more than $65 million since inception.
On June 29, 2021, the board of directors approved the resumption of the Company’s share repurchase program. Pursuant to the terms of the SRP, repurchase requests will be effected at a repurchase price equal to the transaction price on the applicable Repurchase Date (which will generally be equal to the most recently disclosed monthly net asset value (“NAV”) per share), subject to any Early Repurchase Deduction.
1 For a full description of the methodologies used in connection with the calculation of the NAV of Cottonwood Communities, see the Current Report on Form 8-K/A filed with the Securities and Exchange Commission (the “SEC”) on June 8, 2021. Additional information about the monthly NAV is available in the REIT’s Current Report on Form 8-K filed with the SEC on July 16, 2021.
Sources: Cottonwood Communities, Blue Vault, SEC
