Alternative Liquidity Capital has announced an offer to purchase up to 1,050,000 shares of Strategic Realty Trust, Inc.(SGIC) at a price of $0.75 per share. Offer documents are available on the SEC EDGAR database and at Alternative Liquidity’s website. In this article we provide some background information on SGIC, and the offer.
Strategic Realty Trust Background and History
SGIC is a non traded REIT that had the unfortunate timing of launching in early 2009. Consequently, it only raised $100 million, far below what it originally targeted. In 2013 a new external advisor took over management.
Strategic Realty Trust is not currently paying distributions, and there is no assurance that it will pay distributions in the future.
According to the form 10-K for the year ended December 31, 2021:
We are uncertain of our sources for funding our future capital needs and our cash and cash equivalents on hand is limited. If we cannot obtain debt or equity financing on acceptable terms, our ability to acquire real properties or other real estate-related assets, fund or expand our operations and pay distributions to our stockholders will be adversely affected.
On the other hand, SGIC recently sold one of its properties, according to an 8-K filed on October 17, 2022. That may free up some cash to start making distributions soon.
Liquidity Options for Strategic Realty Trust Shareholders
SGIC shareholders have been stuck for a long time with limited liquidity options. The share repurchase program has been suspended for normal circumstances since 2015, and since 2020 it has also been suspended even for cases of death/disability. Secondary trading in the shares has been extremely limited. In September and October 2022, CTT Auctions reported 3 separate auctions for small blocks of shares at prices ranging from $0.76 to $0.78 per share.
SGIC investors seeking liquidity should discuss the tender offer with their financial advisor before making a decision.
About Alternative Liquidity Capital
Alternative Liquidity Capital will also purchase other non-traded alternative investments. If you have questions about the Strategic Realty Trust Offer, or you have other illiquid assets you are looking to sell please contact firstname.lastname@example.org