Cottonwood Communities Determines First NAV of $11.06
June 2, 2021 | Cottonwood Communities, Inc.
Cottonwood Communities, Inc. (“Cottonwood Communities”), a publicly registered non-traded real estate investment trust, has announced a net asset value (“NAV”) of $11.06 per share1 for the company’s classes of common stock as of May 7, 2021, the effective date of its merger with Cottonwood Residential II, Inc. and Cottonwood Residential O.P., LP (the “Merger”).
As previously announced, the Merger resulted in a $1.6 billion multifamily sector-focused REIT (on a consolidated basis) comprised of 35 investments located in major markets across the United States.
The NAV per share is based on the estimated value of the company’s assets, less the estimated value of its liabilities divided by the number of fully-diluted shares/units outstanding. Altus Group U.S. Inc., a third-party firm, assisted with the valuation process.
Cottonwood Communities’ total debt to total assets ratio is 52 percent based on the new appraised values following the merger.
“We are pleased with how the multifamily real estate sector has fared over the past year, but more importantly how our operations and property management teams have remained diligent and have adapted to challenging circumstances by finding creative ways to maintain and drive revenues where possible” said Daniel Shaeffer, CEO of Cottonwood Communities.
1 For a full description of the methodologies used in connection with the calculation of the NAV of Cottonwood Communities, see the Current Report on Form 8-K filed with the Securities and Exchange Commission on May 28, 2021.
Forward-Looking Statements
This release contains statements that constitute “forward-looking statements,” as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are intended to be covered by the safe harbor provided by the same. These statements are based on management’s current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements; no assurance can be given that these expectations will be attained. Actual events may cause the value and return on the company’s investments to be less than that used for purposes of the company’s estimated NAV per share. With respect to the estimated NAV per share, the appraisal methodologies used assumes the properties realize the projected net operating income and expected exit cap rates and that investors would be willing to invest in such properties at yields equal to the expected discount rates. The company can give no assurances in this regard. Even small changes to these assumptions could result in significant differences in the valuations of the company’s real property assets and estimated NAV per share. Additional factors that could cause actual results to differ materially from forward-looking statements include, but are not limited to, the potential adverse impact of the ongoing pandemic related to COVID-19 and the related measures put in place to help control the spread of the virus on the operations of the company and its tenants, which impact remains uncertain; availability of suitable investment opportunities; changes in interest rates; the availability and terms of financing; general economic conditions; market conditions; legislative and regulatory changes that could adversely affect the business; and other factors, including those set forth in the Risk Factors section of the company’s most recent Annual Report on Form 10-K for the year ended December 31, 2020 and filed with the SEC, copies of which are available on the SEC’s website, www.sec.gov. Cottonwood Communities undertakes no obligation to update these statements for revisions or changes after the date of this communication, except as required by law.
