REIT Exchange Fund, a newly formed closed-end fund, has made an offer to shareholders of 33 nonpublicly traded real estate investment trusts to exchange shares in those stocks for shares in its fund. The nominal value of the RXF common stock is $25 per share.
RXF’s board has authorized a cash dividend of $1.75 per share during a 12-month period starting with the closing of the exchange offers. RXF intends to list its stock on the New York Stock Exchange.
The exchange ratio is based on either the REIT’s latest redemption price or latest estimated price as reported in mist most recent Securities and Exchange Commission filing.
Nontraded REITs have been targeted for hostile and other offers because these firms offer shareholders
Nathan Leight, CEO of RXF and founder of Spring Asset Management LLC, RXF's investment adviser, said, "Our goal, by aggregating shareholdings of registered nontraded REITs, is to create a portfolio of the most attractive and diversified American real estate available as a publicly traded closed-end fund. Furthermore, we believe RXF offers a unique opportunity to simultaneously provide liquidity for investors in nontraded REITs while supporting issuers' business model.
“Our objective is to be a constructive new member of the nontraded REIT market. We believe investors in the selected REITs who choose to exchange their shares can gain access to liquidity that might not otherwise be available to them. We also believe that by offering to exchange our shares with investors who might otherwise seek to redeem directly from the selected REITs, we can offer some meaningful benefits to those issuers."
The offer expires at midnight Eastern time on May 21.
