Paladin Realty Income Properties Inc., a Los Angeles-based SEC-registered, non-traded REIT, is terminating its common stock offering and planning to sell all of its assets or explore combining with another company.
The REIT notified existing shareholders of the wind-down in a letter this past week.
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As of March 31, Paladin had raised gross offering proceeds of $78.7 million and owned interests in 13 joint venture investments that own 14 properties, including 12 multifamily properties and two office properties. Most of the properties are located in the Atlanta, Kansas City, Philadelphia, Tampa and San Diego markets.
"Our portfolio represents real estate assets in excess of $220 million," the letter stated. "Our property portfolio is performing well, having weathered the financial crisis, and is currently benefitting from the strong national market for rental apartments."
Paladin REIT's net operating income for the year ended Dec. 31, 2011, was $12.9 million as compared to $10.4 million for 2010 and its net operating income for the quarter ended March 31 was $4 million.
"To date, we have continued to offer our shares because we believed that we could achieve a significantly larger size and scale and generate increased revenue from additional investments over an extended time period," the shareholder letter stated. "However, we have now determined that we are unlikely to achieve that goal, particularly given the relatively short time period remaining prior to a liquidity event [February 2015]."
Paladin REIT is evaluating options to maximize shareholder value. These options may include engaging an advisor to evaluate strategic alternatives. Such alternatives may include, among other things, a liquidation of our assets prior to February 23, 2015 or a sale, merger or other combination with another company or REIT.
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