Resource Innovation Office REIT Inc., a publicly registered non-traded real estate investment trust, is planning to restructure its $1.1 billion initial public offering into a perpetual-life entity, according to filings with the Securities and Exchange Commission. The REIT is sponsored by Resource Real Estate Inc., a subsidiary of Resource America.
On Friday, the REIT’s board unanimously approved the suspension of sales of Class A and Class T shares in the offering, effective immediately. The board also approved the suspension of the company’s distribution reinvestment plan effective May 1st and share repurchase program effective May 21st.
The company said that it anticipates resuming share sales, and amending and reinstating the DRIP and SRP, once the restructuring is complete.
In order to adapt to current market conditions, the REIT said that it plans to revise its fee structure to reduce the upfront fees paid by investors and reduce compensation to its advisor, Resource Innovation Office Advisor.
It also plans on creating new share classes of common stock, which will have a public offering price equal to the net asset value per share of each such class plus applicable selling commissions and dealer manager fees, and updating the NAV daily.
Finally, the REIT expects to amend the share repurchase program to provide additional liquidity to stockholders, and amend the investment guidelines to target additional classes of real estate assets.
The board authorized a tender offer for all of the shares issued and outstanding after it suspends the share repurchase program on May 21st. The date of the planned tender offer has yet to be determined.
Resource Innovation Office REIT focuses on investing in office properties that are located in U.S. cities that attract a young, creative and educated labor pool. Examples include the San Francisco Bay Area, Boston, Washington, D.C., Austin, Seattle and Denver.
According to Summit Investment Research, the company broke escrow with a $2.1 million of equity investment from its sponsor’s parent company in the first quarter of 2016 and has raised $3.9 million equity as of the fourth quarter of 2016. The REIT’s portfolio is comprised of one mixed-use property in Chicago that it purchased for approximately $7.3 million.