Capital Square Housing Trust, a real estate investment trust (REIT) sponsored by Capital Square, announced today the offering of up to four million shares of its Series 2 Class A and Class I Redeemable and Convertible Preferred Stock at $10 per share. The offering is limited to accredited investors.
Capital Square Housing Trust seeks to raise $40 million, subject to an increase up to $45 million, to fund acquisitions, UPREIT transactions, preferred stock redemptions, and other real estate-related investments and working capital, in addition to general corporate purposes.
“The Series 1 preferred stock offering was such a success that Capital Square Housing Trust has launched Series 2,” said Louis Rogers, founder and co-chief executive officer of Capital Square. “The offering includes both Class A shares for sales by broker-dealers and Class I shares for sales by registered investment advisors.”
Investors in Class A who purchase from a broker-dealer are projected to receive a 9.0% annual dividend, paid monthly, and have a $10,000 minimum investment. Investors in Class I who purchase from a registered investment advisor are projected to receive a 9.75% annual dividend, also paid monthly, and have a $5,000,000 minimum investment.
Following the fourth anniversary of the offering, the preferred stock will be convertible by either the REIT or the shareholders at a discounted price of the lesser of 95% of the per share liquidation price and 95% of the net asset value per share, if the REIT is calculating net asset value (NAV) at that time. Shareholders who elect to convert preferred stock to common stock will receive a 5% discount on the price per share of common stock.
Investors in the preferred stock offering may also elect to purchase shares through the Preferred Distribution Reinvestment Plan, or “DRIP,” rather than receiving their monthly cash dividend payments. DRIP participants will acquire additional shares in the offering at the then current purchase price, free of any fees or sales commissions.
“This offering provides investors with an attractive yield, monthly income and a built-in opportunity to participate in the future growth of Capital Square Housing Trust through conversion,” said Whitson Huffman, co-chief executive officer and chief investment officer of Capital Square. “It also supports the REIT’s strategic growth, including accretive acquisitions, credit solutions for future pipeline creation and UPREIT transactions that align with our long-term vision for building a best-in-class portfolio of housing communities.”
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