The board of Steadfast Income REIT, a publicly registered non-traded real estate investment trust, has authorized a $1.00 per share special distribution in lieu of the previously announced anticipated self-tender offer. The board also determined to reinstate and amend the company’s share repurchase program.
Last month, the company declared a $10.84 net asset value per share for its common stock, as of December 31, 2017, a 7 percent decrease from last year’s $11.65 NAV per share. To offer shareholders immediate liquidity, the board authorized a $100 million tender offer with shares of common stock priced at $9.00 each. In connection with the offer, the company also planned to temporarily suspend its share repurchase program at the end of the month.
In letter to shareholders, the company said that “it received early indications that the tender offer would likely be over-subscribed, resulting in a low pro-rata distribution to tendering stockholders that would negate much of the intended benefit.”
The $1.00 special distribution is payable to stockholders of record at the close of business on April 20, 2018. Steadfast Income REIT expects to pay the special distribution on May 1, 2018, primarily consisting of net proceeds received from the $460.8 million joint venture transaction with Blackstone Real Estate Income Trust Inc.
In connection with the special distribution, stockholders’ customer account statements will be updated to reflect an estimated value per share equal to $9.84. There will also be an approximate one-month delay in processing first quarter share redemption requests.
In connection with reinstating the share repurchase program, the repurchase price was revised to $9.15 per share, which represents 93 percent of the estimated value of $9.84 per share. The repurchase price for shares redeemed upon the death or disability of a stockholder will be equal to the average issue price per share for all of the stockholder’s shares.
Steadfast Income REIT invests primarily on the multifamily sector, including stable, income-producing and value-added properties. The company launched its initial public offering in July 2010 and concluded its sales of shares of common stock in December 2013 after raising $745 million in investor equity. The company owns a multifamily property portfolio of 48 properties with a total purchase price of $1.2 billion.