InvenTrust Properties Announces Lower Estimated NAV per Share
May 10, 2018 | James Sprow | Blue Vault
In a letter to shareholders, InvenTrust Properties (the “Company”) announced a new estimated NAV per share of $3.14 as of May 1, 2018. This is down 4.6% from the May 1, 2016, NAV per share of $3.29. The Company explained that the change in the retail landscape has driven the decline in the REIT’s value over the last 12 months. Significant store closings over the last 12 months among apparel-based retailers and department stores, coupled with the effect of internet sales, has put a “dark cloud” over other brick-and-mortar retailers. Valuations have fallen. For example, industry experts and analysts estimate that mall values have fallen about 14% over the last year and power centers were not far behind. The Company reported that grocery-anchored neighborhood or community centers that are smaller in size and don’t contain big box apparel retailers have largely maintained their value during this period of market disruption in the REIT’s portfolio.
These trends are reflected in the Company’s report that its Same-Store Power Centers category of properties lost $0.27 per share in value, while its Same-Store Power Community and Neighborhood Centers category was up $0.03 per share. An estimated gain from acquisitions and dispositions and other portfolio activity of $0.09 per share resulted in a net drop in the Company’s NAV of $0.15.
Tom McGuinness, the Company’s President and CEO, said in the shareholder letter that his team “continues to be proactive and diligent in our efforts to refine our portfolio and the financial performance of our company, as well as prepare IVT for a potential liquidity event.” InvenTrust’s portfolio is currently 78% grocery-anchored.
In the 8-K filing with the SEC on May 9, the Company states that it has complied with FINRA’s rules regarding account statement reporting. The Company engaged Duff & Phelps, LLC, to advise the audit committee and the board of directors. They completed their work in conformance with IPA guidelines. Duff & Phelps applied a discount rate sensitivity analysis on the discount rates used to value the multi-tenant retail properties and single tenant properties, resulting in a value range of $3.00 to $3.29 per share. The mid-point in that range was $3.14.
As of December 31, 2017, the Company wholly owned a portfolio of 71 retail properties and an additional 15 retail properties as 55% owner within a joint venture. Altogether, the properties have 15.4 million square feet of leasable area, and were 93.5% occupied.
According to the Blue Vault’s Q4 NTR Industry Review, the Company was paying cash distributions at an annualized rate of 2.21% based upon the $3.14 NAV. The Company had 774,293,197 shares outstanding as of December 31, 2017, and over 155,000 shareholders.
Sources: InvenTrust letter to shareholders May 9, 2018, and Blue Vault
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