Sila is a net lease real estate investment trust with a focus on healthcare assets. Sila recently reported that it has received approval to list its common stock on the New York Stock Exchange with trading expected to commence on the NYSE on June 13, 2024, under the ticker symbol “SILA.”

Sila merged with another REIT known as with Carter Validus Mission Critical REIT Inc. in late 2019. As of 2021, Sila reportedly owned 153 real estate properties, consisting of 29 data centers and 124 healthcare properties located in 70 markets across the United States with a total purchase price of approximately $3.2 billion, including capital expenditures on development properties placed into service. Sila was incorporated on January 11, 2013 as a Maryland corporation that elected to be taxed as a real estate investment trust (REIT).

As a publicly registered non-traded REIT, Sila was permitted to sell securities to the investing public at large, including numerous unsophisticated retail investors who bought shares upon the recommendation of a broker or money manager. Sila began offering securities in May 2014, and after raising $1.2 billion in investor equity in its initial primary offering, launched a follow-on offering that terminated in November 2018 after raising an additional $86.9 million.

In connection with listing on the NYSE, Sila reportedly intends to commence a $50 million modified “Dutch auction” tender offer, which has the potential to provide liquidity for investors. The price range for the tender offer will be announced at the launch of the tender offer, which is expected to occur on the same day as the listing on the NYSE.

Non-traded REITs are generally illiquid investments. Unlike traditional stocks and mutual funds, non-traded REITs do not trade on a national securities exchange. Many uninitiated investors in non-traded REITs have come to learn too late that their ability to exit their investment position is limited. Typically, investors in non-traded REITs can only exit their investment through redemption directly with the sponsor on a limited basis, and often at a disadvantageous price, or through sales in a limited secondary market.

But now that Sila has been approved for listing on NYSE, investors will finally be able to sell their shares in a liquid market. However, past history of direct listings on non-traded REITs on stock exchanges suggests that the REIT’s shares will likely trade at a substantial discount to their net asset value or “NAV”, which was reported by the Company as $7.48 a share as of December 2023. However this NAV refers to the value of Sila shares prior to a one-for-four reverse split of shares that occurred on May 1, 2024. After the split, investors will now hold one-quarter of the shares that they previously held, and will have to divide the share price in trading on the NYSE by four in order to assess whether they have gained or lost money on their shares relative to their purchase price.

Investors who wish to discuss a possible claim concerning Sila or another alternative investment may contact a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation. Attorneys at the firm are admitted in New York, Wisconsin and various federal courts around the country, and handle cases nationwide (in cooperation with attorneys located in those states if required by applicable rules). This article is intended as ATTORNEY ADVERTISING and is not an official announcement.

Sila recently sent a letter to shareholders recommending they reject an unsolicited tender offer by CMG Partners and its affiliates, CMG Income Fund II LLC, CMG Liquidity Fund LLC and Blue River Capital LLC. Under the tender offer, CMG is offering to buy up to300,000 shares of Sila stock for $3.57 each. This price is approximately 59 percent less than the REIT’s most recent net asset value per share of $8.69, announced in December 2020. CMG’s offer expires on July 15, 2021, unless extended. As well as being much lower than Sila’s estimated NAV per share, CMG’s offer price is also lower than certain reported secondary market transactions, which have reportedly taken place at prices over $6.00 a share during 2021.

Sila merged with another REIT known as with Carter Validus Mission Critical REIT Inc. in late 2019. Sila recently announced plans to sell its 29-property data center portfolio to subsidiaries of Mapletree Industrial Trust, a REIT listed on the Singapore Exchange, for more than $1.3 billion. The transaction is expected to be completed in one or more closings during the third quarter of 2021. As of March 31, 2021, Sila reportedly owned 153 real estate properties, consisting of 29 data centers and 124 healthcare properties located in 70 markets across the United States with a total purchase price of approximately $3.2 billion, including capital expenditures on development properties placed into service.

Sila was incorporated on January 11, 2013 as a Maryland corporation that elected to be taxed as a real estate investment trust (REIT). As a publicly registered non-traded REIT, Sila was permitted to sell securities to the investing public at large, including numerous unsophisticated retail investors who bought shares upon the recommendation of a broker or money manager. Sila began offering securities in May 2014, and after raising $1.2 billion in investor equity in its initial primary offering, launched a follow-on offering that terminated in November 2018 after raising an additional $86.9 million.

Non-traded REITs pose many risks that are often not readily apparent to retail investors, or adequately explained by the financial advisors and stockbrokers who recommend these complex investments. One significant risk associated with non-traded REITs has to do with their high up-front commissions, typically between 7-10%. In addition to high commissions, non-traded REITs like Sila generally charge investors for certain due diligence and administrative fees, ranging anywhere from 1-3%.

Furthermore, non-traded REITs are generally illiquid investments. Unlike traditional stocks and mutual funds, non-traded REITs do not trade on a national securities exchange. Many uninitiated investors in non-traded REITs have come to learn too late that their ability to exit their investment position is limited. Typically, investors in non-traded REITs can only exit their investment through redemption directly with the sponsor on a limited basis, and often at a disadvantageous price, or through sales in a limited secondary market.

Investors who wish to discuss a possible claim may contact a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation. Attorneys at the firm are admitted in New York, Wisconsin and various federal courts around the country, and handle cases nationwide (in cooperation with attorneys located in those states if required by applicable rules).

As recently reported, third-party real estate investment firm MacKenzie Realty Capital (“MacKenzie”) launched an unsolicited tender offer to purchase up to 1 million shares of Carter Validus Mission Critical REIT, Inc. (“Carter Validus”) shares for $3.36 per share. The tender offer is set to expire on June 25, 2018. While the Carter Validus Board has recommended that shareholders reject the offer, the non-traded REIT’s share repurchase program is already fully subscribed for 2018. Further compounding the problem, Carter Validus recently reported that its largest tenant by revenue — Bay Area Regional Medical Center, LLC in Webster, TX — has declared bankruptcy. Currently, investors seeking immediate liquidity on their Carter Validus investment have limited options at their disposal.

Headquartered in Tampa, Florida, Carter Validus is a publicly registered, non-traded REIT that is focused on investing in net leased data centers and healthcare properties. As recently reported, Carter Validus’ portfolio consists of 66 properties, including 3 data centers and 63 healthcare properties. The REIT’s offering, declared effective by the SEC in December 2010, closed in June 2014 after raising approximately $1.7 billion in investor equity.

As a publicly registered non-traded REIT, Carter Validus was permitted to sell securities to the investing public at large, including numerous unsophisticated retail investors who bought shares through the IPO upon the recommendation of a broker or financial advisor. Many ordinary investors may be unaware of the high up-front commissions (typically between 7-10% of the initial investment) associated with non-traded REITs like Carter Validus. Further, some investors may have been improperly steered into Carter Validus, without first being fully informed of the investment’s complex nature and inherent risks.

The greatest risk associated with investing in non-traded REITs like Carter Validus has to do with their illiquidity, a risk that is not readily apparent to many average retail investors. Financial advisors who recommend such complex investments have an affirmative duty to fully disclose and explain the illiquid nature of non-traded REITs. Unlike traditional stocks and publicly traded REITs, non-traded REITs do not trade on a national securities exchange. Therefore, investors in non-traded REITs like Carter Validus have limited options for sale of shares such as redeeming shares directly with the sponsor on a limited basis or sale via a tender offer at what may be a disadvantageous price. However, as noted above, the Carter Validus share repurchase program for 2018 is already fully subscribed., and sales via the tender offer at $3.36 a share would leave Carter Validus investors with substantial principal losses.

Investors who elect to participate in the MacKenzie tender offer will be cashed out of their Carter Validus investment position at $3.36 per share, sustaining considerable losses on their investment (even when factoring in distributions received to date).

Investors who wish to discuss their legal rights may contact Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation.