As of October 1, 2022, investors who have requested a redemption (i.e. liquidation) out of an eREIT will have the amount of their redemption reduced by the proportionate amount of any NAV Distribution that they receive.
The total aggregate value of an investor’s redemption plus the NAV Distribution, if any, will end up being equal to the full amount of such investor’s shares based upon NAV at the time of their request. In addition, investors requesting redemption will continue to receive any standard dividend earned.
Example scenario:
Investor X owns 10 shares of eREIT Y at a NAV value of $10 per share, or a total value of $100.
At some point during the fourth quarter, Investor X requests a redemption of 100% of their shares, for a total redemption value of $100.
On December 31 (the last day of the quarter), eREIT Y declares a one-time NAV Distribution of $2 per share, bringing the NAV per share of eREIT Y down to $8.
Investor X’s redemption amount is reduced by $20 (the value of the NAV Distribution), so Investor X receives a redemption in the amount of $80. When distributions are paid out (typically about two weeks after the end of the quarter), Investor X receives the NAV Distribution of $20.
The net effect to the amount of money they walk away with is zero: Investor X still receives $100, which is equal to the value of their shares on the date they submitted the redemption request.
For any questions, please feel free to reach out to our Investor Relations team.
