Another illiquid alternative investment, a nontraded real estate investment trust dubbed National Healthcare Properties, is slated to begin trading this week on the Nasdaq, which means investors who bought shares in the REIT from financial advisors may eventually sell those units on an open market.
Launched in 2012, National Healthcare Properties, which will trade under the ticker NHP, was part of a series of nontraded REITs and business development companies managed by American Realty Capital, a private partnership led by high-profile investor Nicholas Schorsch.
Schorsch is known to longtime InvestmentNews readers and financial advice professionals as the one-time nontraded REIT czar, a man who turned himself into a billionaire by selling illiquid REITs via financial advisors.
He stepped away from management of his American Realty Capital companies after an accounting problem surfaced at one of his companies in 2014. One of his partners, Brian Block, was found guilty of securities fraud and went to prison over the accounting matter.
According to the Nasdaq website, shares of NHP are expected to start trading tomorrow, April 22. The company is seeking a public offering of 38.5 million shares of its class A public stock.
According to a statement from NHP last week, its IPO price is expected to be between $13.00 and $16.00 per share.
According to a report in Reuters, the REIT was targeting a valuation of about $1.1 billion in its IPO, and the New York-based company could raise as much as $616 million.
It’s been a tricky time for illiquid investment vehicles to list on an exchange, with shares at times trading at sharply lower valuations than previously estimated.
For example, in December the $4.3 billion Bluerock Private Real Estate Fund, formerly an Interval fund with limited buyback opportunities for clients, closed its first day of trading Tuesday at $14.70 per share.
That was a decline of close to 40% from its last published net asset value – NAV - on December 12, of $24.36. On Tuesday, the fund, with the ticker BPRE, was trading at $16.29 per share.
NHP owns a portfolio of senior housing communities and outpatient medical facilities across the United States, according to Reuters.
NHP “is seeking to tap public markets as it bets on rising demand for senior housing and healthcare real estate tied to an ageing U.S. population,” according to Reuters. “Its IPO launch follows the recent debut of senior housing REIT Janus Living, which was well received by investors, signaling renewed momentum for the sector.”
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