I love Friday afternoons. I just saw this filing from Cornerstone Healthcare Plus REIT. It has terminated its offering, and has hired Robert Stanger to assist it with its strategic alternatives. One of the alternatives could include hiring a new managing broker / dealer, which would mean the REIT would reopen its offering at some future point. Cornerstone Healthcare Plus began raising capital in August 2007 and has raised an anemic $130 million (approximately) in investor equity. Here is the entire correspondence:
The share repurchase programs are always the first casualties when REITs start exploring their "strategic alternatives." Investors' limited liquidity options are now zero, except for trying to brave the secondary market. Cornerstone Healtcare Plus has overpaid its distribution since inception, so now that the equity raise is over, I'll watch to see whether the current distribution level is maintained.April 29, 2011
We are writing to inform you of a recent decision made by the Independent Directors Committee of the Board of Directors of Cornerstone Healthcare Plus REIT, Inc. (“CHP”).
At the recommendation of our advisor, the Independent Directors Committee is considering various strategic alternatives for CHP to enhance stockholder value. One of the alternatives under consideration is the hiring of a new dealer manager for the company’s public offering of common stock. The Independent Directors Committee has engaged Robert A. Stanger & Co. as its independent financial adviser to assist in the consideration of strategic alternatives.
In consideration of the uncertainty associated with these developments, our Independent Directors Committee has directed us to take the following steps with respect to our public offering.
The Public Offering. Effective immediately, we are suspending our public offering. Accordingly, we are not making or accepting offers to purchase shares of stock in CHP until further notice.
Suspension of the Distribution Reinvestment Plan. Our offering included a distribution reinvestment plan under which our stockholders could elect to have all or a portion of their distributions reinvested in additional shares of our common stock. Consistent with the above decision with respect to the offering, we are suspending our distribution reinvestment plan effective on May 10, 2011. Therefore all distributions paid after that date will be in cash until further notice.
Suspension of the Stock Repurchase Program. Our stock repurchase program provides stockholders with a limited ability to sell shares to us for cash until a secondary market develops for our shares. Consistent with the decisions to suspend our public offering and distribution reinvestment plan, we are suspending repurchases under the program for reasons other than death effective May 29, 2011. We can make no assurances as to when or if repurchases will resume. The share repurchase program may be amended, resumed, suspended again, or terminated at any time.
We believe that these steps will better position us to maximize stockholder returns over the long term. We take your investment with us very seriously, and we look forward to continuing to serve you.
Sincerely,Terry RousselPresident and CEO