Carter Validus Mission Critical REIT, Inc. (the Company) has announced that its Board of Directors has declared a special distribution of $3.00 per share of common stock, subject to, and conditioned upon, all required third party consents and approvals. The special distribution would be payable on or about March 15, 2018, to stockholders of record at the close of business on February 15, 2018.
The special cash distribution is funded from the proceeds from the dispositions of certain real estate properties between December 2017 and January 2018, including the most recent sale of the Arizona Data Center Portfolio and Miami International Medical Center. The Company estimates the special distribution will consist of gains realized from the sale of properties and other assets as well as depreciation recapture and return of capital from recent asset sales.
“We are pleased to create significant cash liquidity for our stockholders through the sale of certain of the Company’s assets. We look forward to continuing to explore strategic alternatives for the Company and its assets to maximize value for our stockholders,” stated Michael Seton, president of the Company.
“We believe that the special distribution and dividend declared by the Board of Directors will position the Company to ensure flexibility for liquidity opportunities on the remaining portfolio for our stockholders,” as stated by John Carter, chief executive officer of the Company.
In addition to the special distribution, the Company declared daily distributions in the amount of $0.001150685 per share of common stock to stockholders of record as of each date during the period beginning on March 1, 2018, through and including the close of business on May 31, 2018. The March distributions will be paid in April 2018, the April distributions will be paid in May 2018 and the May distributions will be paid in June 2018. Such monthly distribution amounts, when converted to a daily distribution amount and then annualized, would equal a 6.0% annualized rate based on an original purchase price of $10.00 per share less the $3.00 special distribution, or a 6.7% annualized rate based on the December 2017 estimated value per share of $9.26, less the $3.00 per share special distribution.
Including the special distribution of $3.00 expected to be paid on March 15, 2018, "early" investors, those who acquired shares of the Company on April 28, 2011 and received all cash distributions, have received cumulative cash distributions of approximately $7.76 per share. The sum of these cumulative distributions and the estimated value per share of $9.26, less the $3.00 per share special distribution, amounts to $14.021. "Later" investors, those who acquired shares of the Company on June 6, 2014 and received all cash distributions, have received cumulative cash distributions of approximately $5.58 per share, and the sum of these cumulative distributions and the estimated value per share of $9.26, less the $3.00 per share special distribution, amounts to $11.84.
For investors who participated in the dividend reinvestment plan, the amount of cumulative cash distributions, taking into account the special distribution of $3.00 per share, for early and later investors would increase by approximately $1.20 to $15.22 and $0.23 to $12.07, respectively.2
Moelis & Company LLC acted as lead financial advisor to the Company, along with KeyBanc Capital Markets Inc. and SunTrust Robinson Humphrey, Inc. acting as co-advisors, and Morris, Manning & Martin, LLP serving as legal counsel to the Company.
1. For a full description of the limitations, methodologies and assumptions used to value the Company's assets and liabilities in connection with the calculation of the Company's estimated value per share, see the Company's Current Report on Form 8-K, filed with the SEC on December 29, 2017.
2. Assuming full participation in dividend reinvestment plan for the life of the investment and no shares were redeemed. Actual returns will vary depending upon a stockholder's individual circumstances.