Streitwise just distributed Q1 2020 dividends of $0.21/share, which equates to 8.4% annualized, net of fees, based on the original share purchase price of $10.00/share, or 8.3% based on the NAV in effect during Q1 of $10.10/share.
Despite the significant volatility in the publicly-traded financial markets and the severe impact on the real economy, we believe we are still on track to be able to maintain an 8-9% dividend for the remainder of 2020.
We have also recently received several questions about the effect of COVID-19 on Streitwise:
Are redemptions still being honored?
We currently continue to honor qualified redemption requests, subject to the limitations as described in detail in the Stockholder Redemption Plan. We are aware that other REITs have suspended redemptions indefinitely, but currently do not anticipate the need to do so ourselves. We have also been very fortunate that our shareholder base seems to appreciate the long-term nature of commercial real estate, and are pleased with the limited volume of redemption requests to date, especially within the last few weeks.
Is Streitwise well positioned as a company right now?
We were purposeful in our plan to grow a debt-free and non-venture capital backed organization, and therefore we have not historically increased headcount for the sole sake of growing into a valuation. That trajectory has allowed us to avoid any furloughs or layoffs of a single employee. We intend to capitalize on any distress that may materialize in the near future to acquire properties at more interesting prices than we have seen over the last couple years.
Will the dividend drop below 8.4%?
We still believe that we will be able to distribute 8-9% annualized dividends for the remainder of 2020, but the continuing uncertainty of the potential impact of COVID-19 makes forecasts and guidance difficult. Our flexibility has allowed us to make a handful of temporary rent deferral modifications, and as of today we have collected over 95% of adjusted April tenant obligations.
What happens if tenants are not able to pay?
Given the REIT’s financial position and our modest property-level leverage, we have the ability to withstand short-term revenue declines and we believe that many of our tenants are similarly positioned. It is times like these when we appreciate the stabilizing influence of a creditworthy rent roll that includes Wells Fargo, Nationwide Insurance, and Mutual of Omaha, among others. That said, we will evaluate each request for rent relief on a case-by-case basis. In the long run, we believe the quality and location of our properties will allow us to weather economic storms better than most, and back-fill spaces that may ultimately become available.
Can I still invest?
Our offering is still open for additional investments. We are aware of other offerings that have suspended new investments, but we currently have no plans to do so. Candidly, we believe the investing environment may soon provide incredibly interesting acquisition opportunities and we are excited to be in a position to take advantage of them.
Mr. Karsh is a Partner and Co-Founder of Streitwise. His primary responsibilities include sourcing and executing new investments, managing corporate operations, and overseeing investor relations and reporting.
Prior to forming Streitwise, Mr. Karsh was an Acquisitions Analyst for Canyon Capital Realty Advisors and the Canyon-Johnson Urban Funds, where he was responsible for underwriting, structuring and executing value-add and opportunistic transactions. He holds a Bachelor of Arts degree in Political Science from the University of Pennsylvania. Mr. Karsh is a member of ULI and is also a Real Estate & Construction member of the Jewish Federation of Greater Los Angeles.