In September 2017, Medalist Properties (“Medalist”) launched an offering for a diversified REIT, available to accredited and non-accredited investors, that would target multifamily, limited service hotels, flex-industrial, and anchored retail properties in the southeastern U.S. The business plan called for pursuing a value-add strategy of repositioning, leasing, and managing properties in target markets that would achieve gross, annual project level IRR between 13% and 15%. Medalist would target 7% annualized dividends, paid quarterly to investors, and ultimately would pursue a listing transaction on a registered national securities exchange including NASDAQ or the NYSE, which would deliver to investors both daily liquidity and marked-to-market valuation.
Seeded Asset & Pipeline
At the time the deal was launched on the CrowdStreet Marketplace, Medalist Diversified REIT had one seeded asset – a 134,299 square foot retail property located in Gastonia, NC. Additionally, Medalist’s pipeline included an identified acquisition target in Greensboro, NC, for which closing was anticipated shortly.
Dividends to Investors
In 2018, three dividends were declared to common stock shareholders at the annualized 7% rate, with the first dividend paid in April. Together, these three dividends totaled $0.525 per common share.
In late November 2018, Medalist announced the pricing of its initial public offering of 240,000 shares of its common stock at $10.00 per share. These shares, together with 1,995,000 shares of common stock already previously sold, began trading on the NASDAQ Capital Market on November 28, 2018 under the symbol “MDRR”.
Medalist’s completion of its initial public offering established a public market for the common stock, effectively changing the economic terms and dynamics of the original deal. As a result, CrowdStreet has deemed this offering as realized at the initial public offering price of $10.00 per share.
*Net of the most onerous fees charged to clients of CrowdStreet Advisors, LLC, our registered investment advisor subsidiary; an investor’s actual returns on a realized investment may differ.
This report contains explanations of a series of events associated with the Medalist Diversified REIT offering that resulted in an approximate 1.4% (net of most onerous fees) IRR to investors (including those from the CrowdStreet Marketplace). Certain aspects of the report such as dates of major events and the final outcome are easily verifiable while others, particularly underlying reasons behind the sponsor’s business plan execution, are not.
The report partially relies upon the sponsor’s explanations, the information contained within sponsor-produced quarterly reports, and conference calls. This analysis is not an assertion of independently verified facts but, rather, is for informational purposes only, to convey CrowdStreet’s understanding of what transpired.
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