Sila Realty Trust Inc. (Carter Validus ) Liquidation

Sila Realty Trust tells shareholders to reject Tender Offer $3.57 per share

The White Law Group continues to investigate potential securities claims involving broker dealers who may have improperly recommended non-traded REITs such as Sila Realty Trust Inc. (formerly known as Carter Validus Mission Critical REIT IIto investors. 

The firm has handled numerous cases representing investors who invested in high-risk non-traded REITs at the recommendation of their financial advisor.

Sila Realty Trust Inc. (fka Carter Validus Mission Critical REIT II) a non-traded, publicly registered REIT,  invests in data centers and healthcare facilities, according to its website. The company changed its name on September 30, 2020.

After Carter Validus Mission Critical REIT Inc. (CVMC REIT I) and CV REIT II merged in December 2019, they reportedly approved an estimated net asset value of $8.65 per share, calculated as of October 31, 2019. 

The NAV was negatively impacted by transaction costs incurred from Carter Validus Mission Critical REIT’s debt payoff and other merger-related costs ($0.37), distributions in excess of earnings ($0.08), and a change in the value of interest rate swaps ($0.08), according to filings with the SEC.

According to a Letter to Stockholders on June 7 , the Board recommended that the Company’s stockholders reject an unsolicited tender offer to the holders of the shares.

CMG Partners and its affiliates are offering to purchase up to 300,000 Class A shares for $3.57 each, approximately 59 percent less than the REIT’s most recent net asset value (NAV) per share of $8.69, announced in December 2020. CMG’s offer reportedly expired on July 15, 2021.

The board reportedly adopted a new share repurchase program (SRP) in October, where repurchases in 2020 could not exceed 5 percent (1.25 percent quarterly) of the number of shares outstanding on December 31st of the previous calendar year. The company also limits the amount of distribution reinvestment plan proceeds used to fund share repurchases in each quarter to 25 percent of the amount of DRIP proceeds received during the previous calendar year.

Sila Realty Trust recently closed a sale of a 29-property data center portfolio to subsidiaries of Mapletree Industrial Trust, for more than $1.3 billion, according to SEC filings. 

On July 22, the Company announced that its board of directors unanimously approved an updated estimated net asset value of $9.95 per share for each of the Company’s Class A common stock, Class I common stock, Class T common stock and Class T2 common stock, calculated as of May 31, 2021.

Risks of Investing in Non-traded REITs

Non-traded REITs are complicated and often risky investments which should only be sold to high-net worth and sophisticated investors.

Aside from the risks of investing in non-traded REITs, brokerage firms continue to push this type of investment because of the high commissions associated with their sale and creation.  Brokerage firms generally make between 7-10% for selling a non-traded REIT, which is far in excess of the typical commission for more traditional investment types.

Fortunately, FINRA does provide an arbitration forum for investors to resolve such disputes. If a broker or brokerage firm makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment they may be found liable for investment losses in a FINRA arbitration claim.

Filing a Complaint against your Brokerage Firm

Please contact The White Law Group at 1-888-637-5510 for a free consultation, to determine whether you may be able to recover investment losses incurred as a result of Sila Realty Trust.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois. The firm represents investors throughout the country in claims against their brokerage firm.

For more information on the firm and its representation of investors, visit www.WhiteSecuritiesLaw.com.