Business Context and Reporting Period
InvenTrust Properties Corp., a non-listed REIT focused on multi-tenant retail properties, filed this Form 8-K on May 9, 2018. The report discloses the Board of Directors' determination of an estimated Net Asset Value (NAV) per share as of May 1, 2018, to assist broker-dealers with FINRA reporting requirements.
Key Financial Metrics
The filing provides an estimated per share value rather than standard GAAP financial statements for the period.
- Estimated NAV per Share (May 1, 2018): $3.14
- Share Count (Fully Diluted): 774,312,844
- Total Retail Portfolio Value (per share): $3.71
- Fair Value of Debt (per share): $(1.030)
- Cash and Other Assets (net of liabilities, per share): $0.36
- Non-Core/Unconsolidated Entities (per share): $0.10
Material Changes Versus Prior Period
The estimated per share value decreased from $3.29 as of May 1, 2017, to $3.14 as of May 1, 2018, representing a decline of approximately 4.6%.
- Same Store Retail Impact: Decreased value by $0.24 per share.
- Acquisitions and Dispositions: Added $0.07 per share.
- Total Retail Portfolio Change: Net decrease of $0.17 per share.
- Debt Fair Value: Improved (decreased liability) from $(1.230) to $(1.030) per share.
- Cash and Other Assets: Decreased from $0.46 to $0.36 per share.
Outlook, Methodology, and Risks
Methodology: The valuation was performed by Duff & Phelps, LLC, using the Net Asset Value (NAV) method. This involved a discounted cash flow analysis of projected net operating income over a ten-year hold period, applying a weighted average exit capitalization rate of 6.72% and a discount rate of 7.51%.
Management Commentary: The Company continues to refine its portfolio by disposing of properties in low-growth markets and redeploying capital into grocery-anchored neighborhood centers and power centers in target markets. The Board evaluates the distribution rate quarterly, which remains unaffected by this NAV determination.
Risks and Limitations:
- The estimated value does not reflect a liquidity discount for non-listed shares.
- Values are based on assumptions that may not be accurate; different assumptions could yield significantly different results.
- The estimate does not represent the price at which shares would trade on an exchange or the amount realized in a liquidation.
- Future values are subject to macroeconomic factors, interest rate movements, and real estate market fluctuations.
Investor Verification Checklist
- Verify the specific discount rates (7.51%) and capitalization rates (6.72%) used in the valuation model.
- Confirm the composition of the "Total Retail Portfolio" to understand the weight of joint venture assets (IAGM) versus wholly owned properties.
- Review the "Same Store Retail" decline of $0.24 per share to assess operational performance trends.
- Check the status of the loan currently in default, which was excluded from the fair value estimate of debt.
- Monitor future filings for updates on the Company's strategy to achieve liquidity for stockholders.