Business Context and Reporting Period
Company: InvenTrust Properties Corp.
Filing Type: Form 8-K (Current Report)
Date of Report: May 9, 2019
Reporting Period: Valuation as of May 1, 2019
Context: The filing discloses an estimated per share value of common stock to assist broker-dealers in complying with FINRA account statement reporting rules. The company is a non-listed REIT focused on grocery-anchored neighborhood and community centers.
Key Financial Metrics
Estimated Per Share Value (NAV): $3.14 as of May 1, 2019.
Share Count (Fully Diluted): 728,558,989 shares.
Valuation Components (Per Share):
- Total Retail Portfolio: $3.90
- Total Non-Core / Investment in Unconsolidated Entities: $0.05
- Cash and Other Assets (net of other liabilities): $0.16
- Fair Value of Debt: $(0.97)
Valuation Methodology: Net Asset Value (NAV) method utilizing the income capitalization approach (discounted cash flow) for real estate assets. The valuation was performed by Duff & Phelps, LLC.
Material Changes Versus Prior Period
Comparison to May 1, 2018: The estimated per share value remained unchanged at $3.14.
Drivers of Change:
- Same Property Retail: Increased value by $0.20 per share.
- Corporate Debt: Improved value by $0.06 per share (due to fair value adjustments).
- Cash and Other Assets: Decreased value by $0.20 per share.
- Non-Core Investments: Decreased value by $0.05 per share.
- Acquisitions & Dispositions: Net negative impact of $0.01 per share.
Portfolio Performance: The value of real estate assets valued by Duff & Phelps resulted in an overall decrease of 5.8% from the original purchase price plus post-acquisition capital invested.
Guidance, Outlook, and Risks
Management Strategy: The company continues to evaluate its multi-tenant retail portfolio to dispose of properties in low-growth markets and redeploy proceeds into strategic retail properties in target markets or redevelopment opportunities.
Outlook: Management anticipates publishing a new estimated share value within one year. The company believes it has the right assets to provide stability through economic cycles and is pursuing a final liquidity event when market conditions are favorable.
Risks and Limitations:
- The estimated value does not reflect a liquidity discount for non-traded shares.
- The value does not represent the price at which shares would trade on a national exchange or the amount received in a liquidation.
- Valuation is sensitive to exit capitalization rates and discount rates (weighted average discount rate used: 7.33%).
- Forward-looking statements regarding portfolio refinement and liquidity events are subject to macroeconomic factors and interest rate movements.
Investor Verification Checklist
- Verify the independence and conflict-of-interest status of the valuation firm (Duff & Phelps).
- Review the sensitivity analysis regarding discount rates (range provided: $3.00 to $3.29 per share).
- Confirm the distinction between the estimated NAV and the amortized cost basis at which properties are carried in financial statements.
- Assess the impact of the 5.8% decrease in asset value relative to original purchase price.
- Monitor the company's progress on disposing of low-growth assets and redeploying capital as per their stated strategy.