Carter Validus Mission Critical REIT (CVMC) announced in an 8-K yesterday that it is distributing $560 million, or $3.00 per share to investors from its recent property sales. This is the equivalent of a 30% return of capital. The gross property sale proceeds totaled $1.296 billion, and included the data storage transactions I discussed here, along with two other sales, including one of the three troubled medical properties CVMC discussed in its December 29, 2017, valuation filing. Subtracting debt repayments, transaction costs, joint venture payments, and $101 million the REIT is reserving gets to the $560 million being returned to investors.
CVMC is lowering its distribution. The new distribution is 6.7% based on the revised net asset value of $6.26 per share, which is the NAV the REIT disclosed on December 29, 2017, less the $3.00 per share return of capital distribution. This new distribution rate is the equivalent of 6.0% on the original remaining capital of $7.00 per share, which is a reduction from the previous 7.0% per share distribution.
For an interesting exercise, take CVMC's September 30, 2017 total assets, subtract the property sales and remaining debt, and then compare this figure to the original capital the REIT has remaining, including the $101 million of capital that was not returned to investors. Conclusion? Well, I'll let you do the math, but if you get more than $1.2 billion leave a comment.