Modiv Inc (Not traded) has filed to sell a new issue of perpetual preferred stock.
Modiv is a REIT, and not publicly listed. They own 38 properties which cover the span of office, retail, industrial and others–do your due diligence as this company is small and being non traded has minimal information available (until now)
The registration for the new issue can be seen here.
EarlyBird caught this registration statement.
I am not an expert. My opinion is probably worth approx 2 cents.
Just breezed through the registration going to the more interesting parts and I do not see anything that stands out as a glaring issue. Their properties seem to be all over the place for their size. Leases are constantly up for renewal or have to be renegotiated which is normal. All sorts of different property types. No real focus or specialty that I can see. Covid put a damper on them like it did many others.
All in all it does not strike me as “bad” but it does not give a warm and fuzzy feeling either. Almost like some people got together with some money folks and decided to just start buying anything that looked good and now are trying to become more serious… which is where mistakes can be made. Trying to get too aggressive too quickly.
I wonder what the yield will be.
What struck me as unusual was how they have 20 people in management and only 38 properties, seem very top heavy for such a small REIT. Think these are formed for the financial benefit of the management. Preferred should be OK but would not touch the common.
“the value of your investment in us, may decline.”
“this may cause our operations and our stockholders’ investment in us to suffer.”
“These individuals face conflicts of interest in allocating their time among us”
“During times of intense activity in other programs and ventures, these individuals may devote less time and fewer resources to our business than are necessary or appropriate to manage our business.”
…As total-loss investors in BRIX REIT can attest to….
Seems to be a bit incestuous, IMO, and the last of those blurb quotes is concerning.
With some solid and good earning RE related options available such as MNR-C, KREF-A, BFS pfds, Gladstone’s like GOODN and GOODO and LANDO, UMH-D, and others – this one is a real head scratcher.
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Risks Related to Conflicts of Interest
Our officers and our real estate, debt finance, management and accounting professionals face competing demands on their time, and this may cause our operations and our stockholders’ investment in us to suffer.
We rely on our officers and our real estate, debt finance, management and accounting professionals, including Messrs. Halfacre, Pacini and Wirta, to provide services to us for the day-to-day operation of our business. Our indirect subsidiary, Modiv Advisors, LLC, is the advisor to BRIX REIT and Modiv Divisibles, Inc. (“Modiv Divisibles”), a wholly-owned subsidiary of ours which has yet to begin operations. Messrs. Halfacre and Wirta are also directors of BRIX REIT and Messrs. Halfacre and Pacini are managers of Modiv Divisibles. Our Chief Investment Officer, Mr. Broms, is also the Chief Executive Officer of BRIX REIT, Mr. Pacini is also the Chief Financial Officer of BRIX REIT and Modiv Divisibles, Ms. Sciutto, our Senior Vice President and Chief Accounting Officer, is also the Chief Accounting Officer of BRIX REIT and Modiv Divisibles and Mr. Raney, our Chief Legal Officer and General Counsel, is also the Chief Legal Officer and General Counsel of Modiv Divisibles. These individuals face conflicts of interest in allocating their time among us, BRIX REIT and Modiv Divisibles, as well as other business activities in which they may be involved. During times of intense activity in other programs and ventures, these individuals may devote less time and fewer resources to our business than are necessary or appropriate to manage our business. If these events occur, the returns on our investments, and the value of your investment in us, may decline.
Your info in Reader Initiated Alerts should be read by anyone looking at this, thanks for the heads up. I certainly won’t be touching this. Thanks for the heads up.
Hi William,
You’re welcome. In full disclosure, we do own some of the names forementioned, but I wasn’t pushing them for that reason. None of those names nor the likes of PSA or STAG have really given any pause for concern WRT investments. But these BRIX REIT folks seemed to be living rent check to rent check with a large amount of money coming due at once. The communications (read, the lack thereof) from them during the “crisis” was pathetic. Maybe they have righted the ship which would be good, but then again, maybe the next iceberg awaits them in the dark.
Geez. Brix had like the perfect storm of troubles. Even Starbucks did or tried to shaft them on some rent for a year. Then to have student housing and a gym. On top of that their properties were on the books for a value way above the going rate during troubled times. Plus lots of debt.
Yea.. real estate is “easy”…