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| 8-K - 8-K - InvenTrust Properties Corp. | form8-koctdistribution.htm |
October 6, 2016
Dear Stockholder,
On September 22, 2016, the board of directors (the “Board”) of InvenTrust
Properties Corp. (the “Company”) announced that it had approved a reduction to
the Company’s annual distribution rate from $0.13 per share of common stock to
$0.0675 per share of common stock. The adjustment to the distribution rate
equates to a 2016 calendar year total distribution of $0.09875 per share (an
annual rate of $0.13 per share through June 30, 2016 and an annual rate of
$0.0675 per share from July 1, 2016 to year-end). The reduction in the distribution
rate is effective for this quarter’s distribution payable to all stockholders of record on
September 30, 2016.
The Board considered a number of factors in establishing the new
distribution rate, including the items set forth below.
• Sale of Student Housing Properties. On June 21, 2016, the Company
completed the sale of its student housing platform, University House. As
previously disclosed, the student housing properties produced significant
cash flow for the Company. Because the student housing properties are no
longer part of the Company’s portfolio, the previous distribution rate is not
sustainable.
• Spin-Off of Highlands. On April 28, 2016, the Company completed the
spin-off of Highlands REIT, Inc. (“Highlands”), which the Company formed
to hold substantially all of its remaining non-core assets, through the
Company’s distribution of the outstanding common stock of Highlands to
holders of record of the Company’s common stock. Each holder of record
of the Company’s common stock as of the close of business on April 25,
2016 received one share of Highlands’ common stock for every one share
of the Company’s common stock held. The spin-off of the non-core assets
was also a factor in establishing the new distribution rate because several
of these assets produced cash flow for the Company and are no longer part
of the Company’s portfolio.
• Retail Platform Capital Rotation Strategy. In addition to considering the
dispositions of the student housing properties and the non-core asset
portfolio, the Board considered the Company’s retail platform capital
rotation strategy. The Board determined that it is in the best interest of the
Company to retain additional operating cash flow, especially during the
execution of the Company’s capital rotation strategy of refining its retail
portfolio by disposing of non-strategic retail assets in non-core, non-growth
markets and redeploying that capital into strategic retail assets in higher
growth, target markets.
• Pursuit of Flexible Low-Levered Balance Sheet. The Board also
considered that the additional retained operating cash flow will help
maintain a flexible low debt balance sheet in the future and diminish the
impact of upcoming debt maturities. Furthermore, executing on this capital
The Board and
management team is
actively evaluating and
executing on the
Company’s strategy to
effectively allocate the net
proceeds from the student
housing transaction…We
anticipate making an
announcement regarding
the use of the remaining
proceeds from the student
housing sale in the fourth
quarter of 2016.
strategy should put the Company in a better position to evaluate various strategic transactions and potentially
pursue a transaction aimed at achieving liquidity for its stockholders over the next 18 to 24 months.
As the Company executes on its retail strategy, the Board expects to evaluate the distribution rate on a
quarterly basis and, if the Board deems appropriate, adjust the rate to take into account the Company’s progress in
refining and balancing its retail portfolio with stable income producing grocery-anchored properties and open-air power
centers, with higher potential income growth, in the Company’s target strategic markets. The Company believes that
the continuing refinement of its retail portfolio, which it anticipates completing over the next 18 to 24 months, will
position the Company for future success, maximize long-term value for stockholders, and put the Company in a
position to evaluate and execute on strategic transactions aimed at achieving liquidity for its stockholders.
Use of Net Proceeds from Student Housing Transaction
The Board and management team is actively evaluating and executing on the Company’s strategy to effectively
allocate the net proceeds from the student housing transaction. The activities include:
Reducing debt and enhancing our capital structure. Our balance sheet debt metrics continue to
improve and the potential impact of future debt maturities is diminishing.
Using a portion of the capital to invest in premier multi-tenant assets in our target markets with high
job and population growth. We have done that. In the past few months, we have purchased five
open-air retail centers that match our portfolio value growth targets.
Exploring a potential share buyback to provide stockholders an opportunity to liquidate their
investment.
We anticipate making an announcement regarding the use of the remaining proceeds from the student
housing sale in the fourth quarter of 2016.
3rd Quarter Cash Distribution
Enclosed is a check for your cash distribution equaling $0.016875 per share for the third quarter of 2016. If you have
invested through a trustee, a distribution statement is enclosed in lieu of a check. As always please feel free to contact
us with any questions at 855-377-0510 or investorrelations@inventrustproperties.com.
Sincerely,
INVENTRUST PROPERTIES CORP.
Thomas P. McGuinness
President, CEO
Forward-Looking Statements in this letter, which are not historical facts, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 Forward-looking
statements are statements that are not historical, including statements regarding management’s intentions, beliefs, expectations, plans or predictions of the future and are typically identified by words such
as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” “likely,” “will,” “would” and variations of these terms and similar expressions, or the
negative of these terms or similar expressions. These statements include statements about the Company’s plans and strategies and future events, including the declaration, payment, timing and rate of any
future distributions, the availability of cash flow from operating activities to fund distributions, the Company’s ability to successfully execute on its long-term strategy, and the Company’s ability to offer
liquidity to its stockholders, among other things. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by the Company and its
management, are inherently uncertain and involve known and unknown risks that are difficult to predict. For a discussion of factors that could materially affect the outcome of the Company’s forward-looking
statements and our future results and financial condition, see the Risk Factors included in the Company’s most recent Annual Report on Form 10-K, as updated by any subsequent Quarterly Report on
Form 10-Q, in each case as filed with the Securities and Exchange Commission. The Company intends that such forward-looking statements be subject to the safe harbors created by Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, except as may be required by applicable law. You are cautioned not to place undue reliance on
any forward-looking statements, which are made as of the date of this press release. The Company undertakes no obligation to update publicly any of these forward-looking statements to reflect actual
results, new information, future events, changes in assumptions, or changes in other factors affecting forward-looking statements, except to the extent required by applicable law. If the Company updates
one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward looking statements.