April 12, 2019 Comments (0) Blog, Current Investigations

Carter Validus Mission Critical REIT II Update

Carter Validus Mission Critical REIT II Update, Featured by Top Securities Fraud Attorneys, The White Law Group

Concerned about your investment in Carter Validus Mission Critical REIT II?

Have you suffered investment losses in Carter Validus Mission Critical REIT II (CVMC REIT II)? If so, The White Law Group may be able to help you recover your losses by filing a FINRA Dispute Resolution claim against the brokerage firm that sold you the investment.

Carter Validus Mission Critical REIT II is a non-traded, publicly registered REIT that intends to employ a long-term, net lease strategy in order to help mitigate risk, provide greater certainty of rental income and maximize value for fund shareholders, according to their website

According to reports today, Carter Validus Mission Critical REIT Inc. (CVMC REIT I) and Carter Validus Mission Critical REIT II Inc. have entered into a definitive agreement to merge in a stock and cash transaction, creating an entity valued at approximately $3.2 billion.

The transaction is expected to close in the second half of 2019, with the approval of CVMC REIT I stockholders.

The combined company will retain the name Carter Validus Mission Critical REIT II Inc. and will own 146 healthcare and data center properties in 33 states, totaling approximately 8.4 million square feet of space, according to reports.

Under the new agreement, CVMC REIT I stockholders will reportedly receive $1.00 per share in cash and 4681 shares of CVMC REIT II Class A common stock for each share of CVMC REIT I common stock owned.

CVMC REIT I declared an estimated net asset value of $5.33 per share, as of June 30, 2018, according to SEC filings. The company’s previously declared NAV per share was $9.26. Shares were originally sold for $10.00 each.

Tender Offer on  April 23, 2019

Mackenzie Realty Capital has just extended an unsolicited tender offer to purchase shares of Carter Validus REIT for just $3.16/share.

According to Mackenzie, the merger is subject to closing conditions and “its consummation cannot be assured. Even if approved, however, there can be no guarantee that the merger will close in a timely manner, or at all, and does not provide full cash-out to Carter stockholders.”

Further, the repurchase program is now reportedly limited to requests in connection with the death, qualifying disability, or involuntary exigent circumstances of a stockholder. Also, Carter Validus II could be similarly limited, making it difficult for investors to sell any or all their shares in the repurchase program.

Update on December 30, 2019

As we told you in a recent post, Carter Validus Mission Critical REIT II recently merged with an affiliated non-traded REIT, Carter Validus Mission Critical REIT. The company noted that while the value of its pre- and post-merger real estate portfolio increased, the NAV was negatively impacted by transaction costs incurred from Carter Validus Mission Critical REIT’s debt payoff and other merger-related costs ($0.37), distributions in excess of earnings ($0.08), and a change in the value of interest rate swaps ($0.08), according to filings with the SEC.

As of October 31, 2019, the company reportedly approved an estimated net asset value of $8.65 per share for the REIT’s Class A, Class I, Class T, and Class T2 shares of common stock. The shares originally sold for $10.00 per share, and the previous Net Asset Value was $9.25 per share.

The Trouble with Non-traded REITs

Non-traded REITs are complicated and often risky investments which should only be sold to high-net worth and sophisticated investors.

The White Law Group is investigating the liability that FINRA registered brokerage firms may have for improperly selling high-risk REITs, like Carter Validus Mission Critical REIT II, to their clients.

Notwithstanding the risks of investing in REITs, brokerage firms continue to push this type of investment because of the high commissions associated with their sale and creation.  Brokerage firms generally make between 7-10% for selling a REIT, which is far in excess of the typical commission for more traditional investment types.

Fortunately, FINRA does provide for an arbitration forum for investors to resolve such disputes. If a broker or brokerage firm makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment they may be found liable for investment losses in a FINRA arbitration claim.

Free Consultation

Please contact The White Law Group at 1-888-637-5510 for a free consultation, to determine whether you may be able to recover investment losses incurred as a result of your purchase of Carter Validus Mission Critical REIT II or Carter Validus Mission Critical REIT I.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee. The firm represents investors throughout the country in claims against their brokerage firm.

For more information on the firm and its representation of investors, visit www.WhiteSecuritiesLaw.com.

Click here for your FREE consultation.

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