Adventus Realty Trust by its Trustee, Adventus Realty Services Inc. (the “Trust” or the “Company”) announced today it has suspended monthly distributions until further notice in response to the rapidly changing interest rate environment and impact on the Trust’s variable rate debt.
As previously disclosed in our Report to Unitholders for the six months ended June 30, 2022, we have been closely monitoring current debt markets and the interest rate environment. The Trust has approximately $386 million in variable rate debt, representing approximately 64% of its total debt outstanding, which is exposed to changes in the 30-day London Inter-Bank Offered Rate (LIBOR), which has been increasing significantly in recent months. For example, this rate was 0.10% on July 1, 2021 when $350 million of the Trust’s variable rate debt was issued. On April 1, 2022, the rate was 0.44% and has increased to 3.48% as of October 17, 2022.
The Trust is carefully considering its capital allocation strategy, with a focus on liquidity, debt reduction and cash flow management, while reducing portfolio risk and meeting current obligations with respect to previously committed investment initiatives.
Adventus is a Canadian based private Real Estate Investment Trust (REIT) and is focused on US income producing commercial real estate, in the suburban office markets of Chicago, Illinois and Atlanta, Georgia. For more information on Adventus, including our team, corporate strategy, photo gallery, details of our portfolio and press releases, we invite you to visit our website at www.adventusrealty.com.
Cautionary Statements Regarding Forward-Looking Statements
This press release may contain forward-looking statements with respect to the REIT and its operations, strategy, financial performance and financial condition, as well as with respect to the previously disclosed acquisitions and future acquisitions of properties. These statements generally can be identified by the use of forward-looking terminology such as “anticipate”, “believe”, “plan”, “forecast”, “expect”, “intend”, “would”, “could”, “if”, “may” and similar expressions. The actual results and performance of the REIT and the acquisitions discussed herein could differ materially from those expressed or implied by such statements. Accordingly, readers should not place undue reliance on forward-looking statements. These cautionary statements qualify all forward-looking statements attributable to the REIT and persons acting on its behalf. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Some important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, changes in interest rates, competition and changes in securities or other laws or regulations or the application thereof. The cautionary statements qualify all forward-looking statements attributable to the REIT and persons acting on its behalf.
Unless otherwise stated, all forward-looking statements speak only as of the date of this press release. Except as required by applicable law, the REIT specifically disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.
ADVENTUS REALTY TRUST
By its Trustee: ADVENTUS REALTY SERVICES INC.
Per: Rodney B. Johnston, FCPA, FCA
President and Chief Executive Officer