An unsolicited tender offer has been launched to purchase up to 500,000 Class E shares of Griffin Realty Trust Inc. Griffin is a non-traded, publicly registered real estate investment trust (REIT). It was earlier known by the name of Griffin Capital Essential Asset REIT. The tender offer has been made by CMG Partners LLC. It offers $3.76 per share, which is almost half of the most recently published NAV of $7.43 as of the 30th of June, and is open till the 4th of October, 2022.
A letter to shareholders has been filed by Griffin with the Securities Exchange Commission (SEC). It portrays Griffin’s neutrality on the offer, neither recommending acceptance nor rejection.
Redemptions of these shares by holders are entertained by the REIT only when it is a case of death, disability or determination of incapacitation or incompetence of the holder. Total redemptions are capped at $5 million per quarter, with the next assigned date for it being the 30th of September.
Many Griffin REIT investors continue looking at all options to recoup their investment losses. Investors are encouraged to contact our experienced investment fraud lawyers to discuss any details in a confidential and free consultation at 1-800-856-3352.
The majority interest in a portfolio valued at $1.13 billion, consisting of 41 office properties, with 53 buildings and one parcel of land, has recently been sold by Griffin under a ‘strategic monetization process’ announced by the REIT in August. It foresees a newly public company being spun off from the REIT with the ownership of assets that are primarily industrial, with a smattering of office assets thrown in. A listing on a national exchange is also envisaged.
The remaining assets, primarily office, are expected to be liquidated over time, with the realized proceeds being distributed to shareholders. Completing the sale of these residual assets will enable the company “to fully liquidate and cease operations.”
Apart from its equity in a 41-office property owning joint venture, Griffin’s portfolio of industrial and office properties usually involves net leasing to a single tenant whose creditworthiness has been established by the company. Their portfolio includes 91 buildings in 80 industrial and office properties that are all fully owned by them. The portfolio is spread across 24 states and comprises 21.6 million real estate that is rentable. Griffin Realty Trust operates as an internally managed non-traded REIT.
Regulations & Risks With Non-Traded REITs
Regulators have proposed new rules to limit the concentration of non-traded REITs. Non-traded REITs generally offer limited liquidity through share redemption programs. These programs may have restrictions, such as a cap on the number of shares that can be redeemed in a year. Additionally, non-traded REIT shares are not publicly traded, so the value of the investment can decline or even become worthless.
Although non-traded REITs do not have publicly traded shares, they are still subject to SEC rules and must file regulatory filings and annual financial reports. Furthermore, non-traded REITs generally have a set maturity date. As such, investors should plan for a long-term holding period.
Many investors have invested in non-traded REITs like Griffin that didn’t fully understand the risks involved and have had huge losses. If you or someone you know has invested in a non-traded REIT, please contact our experienced investment fraud lawyers to discuss any details in a confidential and free consultation at 1-800-856-3352.