Centurion Apartment REIT Announces Increase in Unit Distributions
The Board of Trustees Centurion Apartment Real Estate Investment Trust (REIT) has approved an increase in annual distributions of $0.02 per Class A REIT Unit and $0.11 per Class F and Class I Unit with the increase taking effect for Unitholders of record on December 31, 2021. Class A distributions will be $0.84/Unit/Year and Class F and Class I distributions will be $1.04/Unit/Year.
Based on the current Net Asset Value (NAV) price of $20.628 this implies a Class A distribution yield of 4.07% and Class F and Class I distribution yields of 5.04% excluding the benefits of the Distribution Reinvestment Plan (DRIP) discount of 2% on reinvested distributions which adds approximately 0.15% and 0.19% per annum to the Class A, Class F and Class I yields respectively. The differential in Unit Class distribution rates reflects the estimated difference in Unit Class costs due to embedded commissions and trailers disclosed in the Offering Memorandum of the REIT.
The last time distributions were increased was in May of 2012.
Commenting on the change, Greg Romundt, Centurion President and CEO stated:
“We have always been very focused on maintaining a balance between a variety of objectives in setting distribution rates to ensure that the REIT could:
- have a distribution rate that was at a low risk of having to be reduced
- execute on its overall short and long term objectives
- raise the capital it needs to meet its short term and long term objectives and align with its opportunity set
- ensure that the cost of capital didn’t create an artificially high watermark which could incentive making bad decisions, like pursuing excess risk to earn a yield that may be too high
- make investments in opportunities where initial distributable income may be low or even zero but that made sense in a portfolio to increase diversification, lower risk or where long term capital growth potential could contribute to portfolio returns (e.g., new developments, new acquisitions requiring lease up and value add opportunities)
We also know that inflation is picking up, as I have written and talked about continually for the better part of a year and a half, and that this inflation will not be transitory. We know that our investors are concerned about inflation and believe that apartments are an excellent hedge against inflation risk in the long term. These distribution increases reflect our objective of helping our investors outperform inflation and to protect the value of distributions in real, inflation adjusted terms to the extent possible while also balancing against the REIT’s other objectives. The Board of Trustees will continue to evaluate distribution rates going forward”.