With the aim of providing liquidity to shareholders, InvenTrust Properties Corp. has initiated the process to list on the New York Stock Exchange. The process will be overseen by their Board and is expected to be completed in October 2021. Wells Fargo Securities LLC and BofA Securities Inc. have been appointed as advisors.
A brief history of InvenTrust
InvenTrust, which started life as Inland American Real Estate, was launched in 2005 and became a self-managed REIT (Real Estate Investment Trust) in 2014. It currently operates as a publicly registered non-traded REIT.
It has an investment portfolio spanning 65 retail properties with a combined floor area of 10.8 million square feet. It invests in shopping centers in the US Sun Belt region, with a focus on ones that are grocery-anchored properties.
There have been multiple lawsuits against financial advisors and broker-dealers that sold Iventrust REITs due to the liquidity and investor risk profile issues. According to Haselkorn & Thibaut, a national investment fraud law firm, many investors were unaware that the non-traded REITs were not aware of the risks associated with non-traded investments until they try to sell them. When Iventrust lists on the exchange, original investors will likely see massive losses of their princpal.
NAV and dividend
The last declared Net Asset Value (NAV) was $2.89 per share, declared on 1st December 2020. Since the company affected a reverse stock split in the ratio of 1-for-10 in August 2021, the NAV can be assumed to translate to $28.90 of the new common stock, as 10 common stock shares of the REIT were changed into 1 share of the new common stock.
With a “commitment to increasing the dividend by 5 percent starting with the fourth quarter 2021 distribution due to be paid in January 2022,” a dividend rate of $0.205 per share has been announced for the fourth quarter. This translates to an annualized dividend amount of $0.821 per share.
Preparations for the listing
Apart from the reverse stock split, which appears to have been done with a view to the listing, sharing the company’s business plans as well as objectives with select investors is also on the anvil.
A $100 million tender offer through the modified ‘Dutch auction’ method is planned. The price range of the offer is yet to be determined.
Speaking about the listing plans, President and CEO Daniel Busch said, “We believe InvenTrust’s portfolio of premier Sun Belt, grocery-anchored assets coupled with our flexible capital structure presents a unique investment opportunity within the traded strip center sector. We believe pursuing a direct listing at this time will provide immediate liquidity in the most efficient manner for our current shareholders.”