Hospitality Investors Trust Inc. (“HIT”), previously known as American Realty Capital Hospitality Trust, recently announced a net asset value (NAV) of $9.21/share, representing a 33.6% decrease from the last announced NAV of $13.87/share. The Board of HIT stated that this decrease in NAV was due to lower estimates of occupancy, increase in competition, and increase in costs.
As we previously reported, back in October 2018, the company, a public, non-traded real estate investment (REIT) with a focus on hospitality properties in the United States, announced a share repurchase program at $9.00/share effective December 31, 2018. At the time, $9.00/share was an approximate 35% discount to the REIT’s then most recent NAV of $13.87/share. When HIT’s board announced the buyback program in October, they recommended that only those investors that required immediate liquidity should sell their shares, as the $9.00/share price was a significant decrease in the current market value. The buyback program only lasted until February 2019.
HIT shares were originally offered at $25.00 a share, leaving investors at the initial offering price with principal losses of about 60% (not accounting for distributions).