The White Law Group continues to investigate potential securities claims involving Peakstone Realty Trust Inc. (fka Griffin Realty Trust) to investors. Our firm continues to file claims on behalf of investors who have suffered investment losses in Peakstone.

Peakstone Realty Trust’s journey from Griffin Realty Trust to a publicly listed entity on the New York Stock Exchange had its ups and downs, with investors eagerly anticipating liquidity following Griffin’s suspension of redemptions. However, the trading price of Peakstone (PKST) upon its debut disappointed many. After a 1 for 9 reverse stock split, the company estimated its Net Asset Value (NAV) at $66.87, significantly higher than its trading price.

Shares opened at $8 per share and closed at $11.65 on the first day of trading in April 2023. While it reached a high of $39.65 in June, it closed at $13.75 per share yesterday. This fluctuation reflects the volatility in the capital markets and the challenges specific to the office property market, which have changed negatively since the last NAV update.

Decrease in Revenue – Peakstone Realty Trust

As of March 31, 2024, Peakstone reported: revenue of $59.2 million, an 11.64% decrease from last year’s $67 million. The company notes that the change in revenue is due to the “execution of strategic dispositions.”

PKST reported net income of approximately $5.5 million (net income attributable to common shareholders of approximately $5 million, or $0.14 per basic and diluted share); and same store cash net operating income of approximately $44.8 million, a 0.7% increase compared to the same quarter in 2023.

In other news, last December, Peakstone reportedly announced the termination of a former executive vice president, without cause. No details regarding the termination were provided.

Office REITs Take a Hit – PKST

Peakstone Realty Trust (NYSE: PKST) is a industrial and office REIT. Unfortunately for investors, Office REITs in particular have taken a hit due to the changing landscape of remote work. With more people working from home, the demand for office space has shifted.

Companies are adopting flexible work arrangements, which might mean they need less office space or could opt to downsize their current office footprint. Reduced demand for office space can lead to higher vacancy rates in office properties, potentially impacting the rental income generated by office REITs. If these REITs have a significant investment in office properties, they could experience declining rental income and property values.

Peakstone Reverse Stock Split – What does it mean for Shareholders?

A reverse stock split occurs when a company decreases the number of shares in order to increase the dollar value of the individual shares. In one example, if the company has $100,000 worth of outstanding shares, with 10,000 shares at $10 per share, they may elect to create 2,500 shares at $40 per share.

Because the share price increases, it may look more attractive to new investors, resulting in more money invested into the company, creating the perception that a company’s stock has increased in value. Or a company may do a reverse stock split so that its share price will appear like its competitors.

Unfortunately, companies whose stock price has been decreasing for a while may execute reverse stock split in an attempt to hide it. It potentially could be a sign that the company is in poor financial health.

Griffin Realty Trust – NAV Declines