MacKenzie Realty Capital, Inc 8-K, filed Mar 7, 2023
MacKenzie Realty Capital, Inc. (MKZR)
8-K
2023-03-07
For: 2023-03-07
View Original
Added on
April 12, 2026
About this 8-K
MacKenzie Realty Capital, Inc filed this 8-K on March 7, 2023.
Items reported
- Item 7.01: Regulation FD disclosure
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): March 7, 2023
(Exact Name of Registrant as Specified in Its Charter)
(Commission File Number)
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(State or Other Jurisdiction of Incorporation)
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(I.R.S. Employer Identification No.)
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(Address of principal executive offices, including zip code)
(925 ) 631-9100
(Registrant’s telephone number, including area code)
NOT APPLICABLE
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading
Symbol(s)
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Name of each exchange on which registered
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act
of 1934 (§240.12b-2 of this chapter):
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 7.01 Regulation FD Disclosure.
On or about March 15, 2023, MacKenzie Realty Capital, Inc., will mail a letter to preferred stockholders.
The full text of the letter is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.
On March 6, 2023, MacKenzie Realty Capital, Inc., mailed a letter to all common stockholders.
The full text of the letter is attached as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated by reference herein.
The information in this Current Report is furnished pursuant to Item 7 and shall not be deemed to be “filed” for the purpose of Section 18 of the
Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section. This information will not be deemed an admission as to the materiality of any information contained herein that is required to be disclosed solely by Regulation
FD.
Statements in this Current Report on Form 8-K, including intentions, beliefs, expectations, or projections relating to items such as the timing of payment of
dividends are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based on current expectations and
assumptions with respect to, among other things, future economic, competitive and market conditions and future business decisions that may prove incorrect or inaccurate. Important factors that could cause actual results to differ materially from
those in the forward-looking statements include the risks described in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended June 30, 2022, as amended, and its other filings with the Securities and Exchange
Commission.
Item 8.01 Other Events.
First Calendar Quarter 2023 Dividends
Mackenzie Realty Capital, Inc. is pleased to announce an increase in our regular quarterly dividend, now at the rate of $0.115 per share. The Board hopes to
continue to raise this rate in future quarters. The dividend will be payable to shareholders of record March 31, 2023, and it will be paid on or about April 20, 2023.
The Board approved a preferred share dividend in the amount of $0.125 per month per preferred share for holders of record as of April 30, 2023, May 31, 2023,
and June 30, 2023, to be paid in July 2023.
Statements in this Current Report on Form 8-K, including intentions, beliefs, expectations, or projections relating to items such as the timing of payment of
dividends are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based on current expectations and
assumptions with respect to, among other things, future economic, competitive and market conditions and future business decisions that may prove incorrect or inaccurate. Important factors that could cause actual results to differ materially from
those in the forward-looking statements include the risks described in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended June 30, 2022, as amended, and its other filings with the Securities and Exchange
Commission.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
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Exhibit Number
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Description
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99.1
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Letter to preferred stockholders
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99.2
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Update Letter to common stockholders
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
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MACKENZIE REALTY CAPITAL, INC.
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(Registrant)
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Date: March 7, 2023
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By:
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/s/ Robert Dixon
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Robert Dixon
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President
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March 15, 2023
Dear Shareholder:
MacKenzie Realty Capital, Inc. (“MRC”) is again issuing its quarterly preferred share dividend. The dividend is payable to shareholders of record as of
March 31, 2023. Shareholders accepted into the Fund as of January 1 (or prior) will receive a dividend of $0.375 per share, which is equal to an annualized rate of
6%. Shareholders accepted into the Fund as of February 1 will receive 2/3rd of that amount (or $0.25 per share), and those accepted as of March 1 will
receive 1/3rd of that amount (or $0.125 per share).
Enclosed is your Investor Statement with this quarter’s payment details. If you invested through a trustee or custodian or requested a third-party
deposit, or if you participate in the Dividend Reinvestment Plan, your dividend has been transmitted as directed. If you receive a cash dividend, your check will arrive separately.
In addition, the Board has approved a preferred share dividend at the rate of $0.125 per month to holders of record as of April 30, 2023, May 31, 2023, and
June 30, 2023, to be paid in July 2023.
We appreciate your investment in MRC. We are excited about the interest we have received in MRC from investors and the investment opportunities we have
encountered. We believe your confidence in us will be rewarded.
Sincerely,
MacKenzie Realty Capital, Inc.
Robert E. Dixon, President
The statements and certain other information contained in this letter, which can be identified by the use of forward-looking
terminology such as “may,” “will,” “expect,” “continue,” “remains,” “intend,” “aim,” “towards,” “should,” “prospects,” “could,” “future,” “potential,” “believe,” “plans,” “likely,” “anticipate,” “position,” “probable,” “committed,” “achieve,”
“rewarded,” and “focused,” or the negative thereof or other variations thereon or comparable terminology, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, and are subject to the safe harbors created thereby. These statements should be considered as subject to the many risks and uncertainties that exist in the Company’s operations and business environment.
Such risks and uncertainties could cause actual results to differ materially from those projected. These uncertainties include, but are not limited to, economic conditions, market demand and pricing, competitive and cost factors, and other risk
factors. This letter does not constitute an offer to purchase or sell Mackenzie securities. No money or consideration is being solicited by the information in this letter or any other communication and, if sent, money will not be accepted and will
be promptly returned. A potential investor’s indication of interest does not create a commitment to purchase the securities we are offering. A copy of the Offering Circular may be obtained on the SEC’s website:
https://www.sec.gov/Archives/edgar/data/1550913/000155091322000031/mrc253g2111022.htm.
March 6, 2023
Dear Shareholder:
On February 27, 2023, MacKenzie Realty Capital, Inc. announced the updated net asset value of its common shares as of December 31, 2022. We are writing
this letter to give you further information on the valuation and performance of the portfolio as a whole, and to notify you of the new issuance price for the dividend reinvestment program.
1. Decline in Net Asset Value - MacKenzie has
published its estimate of NAV as of December 31, 2022 of $7.38, a decline of about 23% compared to December 31 of 2021. Property values are driven largely by net operating income and capitalization rates (“cap rates”). Our overall portfolio
performance increased, but that increase was more than offset by increases in cap rates. Cap Rates and property values are inversely proportional to each other, meaning an increase in cap rates will result in a proportional decrease in property
value. If cap rates rise from 5.0% to 5.5%, a 10% increase, then the resulting property value will experience an approximate 10% decrease. As widely reported in the news, cap rates from commercial properties have increased across most markets in
the US in the past year, resulting in reductions in values of such properties regardless of property operations. MacKenzie’s properties were not immune to these trends.
2. Fundamental performance - The occupancy and
rental revenue at our consolidated properties increased, indicating that the portfolio fundamental performance is strong. The average total occupancy at our consolidated properties increased from 83% at December 31, 2021 to 91% at December 31, 2022.
3. Outlook
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(i)
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Dividends - The Company realized a large
gain in January of over $10 million, which should be enough to support our regularly increasing quarterly dividend through the end of calendar 2023. We may be dependent upon another realized gain in order to continue the increases through
2024.
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(ii)
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Net asset value - We are unsure whether
the recent rise in cap rates has run its course, or whether it will continue. It is also unknown whether the domestic economy will go into recession this year. Given these two material risks, we cannot predict whether NAV will increase or
decrease next year. We intend to focus on fundamental performance and believe that eventually NAV will follow.
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(iii)
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Listing - The Company’s Charter requires
it to pursue a liquidity event by year-end 2024, or to solicit a vote to approve an extension. We are hopeful that interest rates and cap rates come down a bit this year as performance continues to rise. With a potentially increased NAV
next year plus another year of rising dividends, we hope to list our common shares by late 2024.
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(iv)
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New Development - The Company is excited
to announce the upcoming launch of our new multi-family development “Aurora at Green Valley”. We have already completed substantial work toward breaking ground and anticipate doing so later this summer. We will be offering the opportunity
to participate in this development to select accredited investors.
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As a result of this update, the Board has lowered the price of Shares issued under the Dividend Reinvestment Program to $7.38 per share, the new NAV. If you
wish to make any changes to your distribution election, please submit an Account Maintenance Form, found on our website – www.mackenziecapital.com/mrcforms/, no
later than April 15, 2023. Any forms received after this date will be processed after the 1st Quarter 2023 distribution. Please note, if your investment is held in a custodial account the form must also be signed by your custodian.
If you have any questions or would like to discuss your request in detail, please free to contact our Investor Services Department at 800-854-8357 Option 6 or
email us at investors@mackenziecapital.com.
Sincerely,
Robert E. Dixon, President
Cc: Registered Rep, BD
The statements and certain other information contained in this letter, which can be identified by the use of forward-looking
terminology such as “may,” “will,” “expect,” “continue,” “remains,” “intend,” “aim,” “towards,” “should,” “prospects,” “could,” “future,” “potential,” “believe,” “plans,” “likely,” “anticipate,” “position,” “probable,” “committed,” “achieve,”
“rewarded,” and “focused,” or the negative thereof or other variations thereon or comparable terminology, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, and are subject to the safe harbors created thereby. These statements should be considered as subject to the many risks and uncertainties that exist in the Company’s operations and business environment.
Such risks and uncertainties could cause actual results to differ materially from those projected. These uncertainties include, but are not limited to, economic conditions, market demand and pricing, competitive and cost factors, and other risk
factors.
This letter does not constitute an offer to purchase or sell Mackenzie securities; only the Offering Circular should be relied upon for
any investment decision. No money or consideration is being solicited by the information in this letter or any other communication and, if sent, money will not be accepted and will be promptly returned. A potential investor’s indication of interest
does not create a commitment to purchase the securities we are offering. Any such indication of interest may be withdrawn or revoked, without obligation or commitment of any kind, at any time before notice of its acceptance is given and all other
requirements to accept an investment from a potential investor are met. A copy of the Offering Circular may be obtained on the SEC’s website: https://www.sec.gov/Archives/edgar/data/1550913/000155091322000031/mrc253g2111022.htm