Tel Aviv-based investment fund Comrit Investments 1 LP, which currently owns approximately 296,500 shares of Benefit Street Partners Realty Trust REIT, which translates to 0.7 percent of the common stock outstanding as of February 28, 2021, had made an unsolicited offer to its shareholders to purchase an additional 2.3 million shares of Benefit, representing approximately 5.2% of the stock.
This offer was at $11.02 per share, making the total value approximately $25.3 million. The timeline for the offer, originally due to expire on 31st May 2021, has recently been extended to 30th June, 2021.
About Benefit Street Partners Realty Trust
Benefit Street Partners Realty Trust is a non-traded but publicly registered real estate investment trust (REIT). As of September 2020, its NAV (net asset value) per share was $17.88. On 31st December 2020, it had a GAAP book value per share of $17.94.
Earlier known as Realty Finance Trust, the REIT had initiated business activities in May of 2013. Benefit Street, a wholly-owned subsidiary of Franklin Resources Inc., took over management of the company from AR Global in September 2016. As of Q4 2020, the REIT had $3 billion in assets under management (AUM).
Its primary business is origination, acquisition, and management of commercial real estate debt investments that are secured by properties, within the US as well as outside.
Letter to Shareholders
Contending that Comrit was seeking to purchase the shares at $11.02 which was a “significant discount to fair value in order to make a significant profit,” the REIT, in a letter to shareholders, has asked them to reject the offer.
The letter goes on to say that as recently as January 2021, the REIT had purchased back 506,024 shares from interested shareholders, at the most recent NAV value of $17.88, from the proceeds of the distribution reinvestment plan (DRIP). Further, it was hopeful of repurchasing more shares in July 2021 from interested shareholders, at the lower of its GAAP book value or estimated 30th September net asset value per share, once again using available DRIP proceeds for the purpose. The letter also clarified that the repurchase program will be limited to the DRIP proceeds available, and not go beyond.
Investors have file lawsuits against financial advisors and broker-dealers over the sales of Benefit Street Partners Realty Trust. The lawsuits allege substantial losses which the investors occur when they try to sell the non-traded REITs. Investors claim that the financial advisor did not fully disclose the risks and improperly sold the non-traded REIT.
Haselkorn & Thibaut has set up a toll-free number for investors to call at 1 888-628-5590 for a free case review.