Bullish indicating open at $55-$60, IPO prices at $37
ORINDA, Calif. - MacKenzie Realty Capital, Inc. (NASDAQ: MKZR), a real estate investment trust (REIT) specializing in commercial and residential properties, has secured approximately $4.8 million through a registered direct offering and concurrent private placement. The company, currently valued at approximately $24 million in market capitalization, appears undervalued according to InvestingPro analysis, which identifies several opportunities in the current market environment. The West Coast-focused company announced the sale of over 2.8 million shares of common stock, or pre-funded warrants as an alternative, to a single institutional investor.
The transaction also includes the issuance of Series A and Series B common warrants, which could potentially lead to the purchase of an additional 4.2 million shares of common stock. The Series A warrants, exercisable six months from issuance, will expire 18 months later, while Series B warrants have a five-year term. Both sets of warrants have an exercise price of $1.71 per share, matching the effective offering price for each share of common stock (or pre-funded warrant).
This offering is expected to close by March 3, 2025, with Maxim Group LLC serving as the sole placement agent. The proceeds are earmarked for various corporate purposes, including capital expenditures, potential acquisitions, strategic principal payments on outstanding loans, and funding for their preferred stock share repurchase program, among others. However, specific acquisition targets or loans have not been identified at this time.
MacKenzie’s shares and warrants are being offered under a shelf registration statement, which was declared effective on January 15, 2025. The unregistered warrants and the shares issuable upon their exercise were offered in accordance with the Securities Act of 1933, as amended.
The company, established in 2013, aims to allocate at least 80% of its total assets in real property, with a balanced focus on multifamily and boutique class A office spaces. MacKenzie has consistently paid dividends annually since its inception, currently offering an attractive 11.7% dividend yield, and has demonstrated strong revenue growth of 57% over the last twelve months. The company currently holds a portfolio that includes interests in multifamily and office properties, along with developments. InvestingPro subscribers have access to 12 additional key insights about MacKenzie’s performance and potential.
This press release contains forward-looking statements regarding the offering’s terms and the intended use of proceeds, among other aspects of the company’s future operations. These statements are based on current expectations and assumptions and are subject to various risks and uncertainties, including the company’s current liquidity position, with a current ratio of 0.8 indicating potential short-term financial constraints. For a complete analysis of MacKenzie’s financial health and growth prospects, investors can access detailed metrics and expert insights through InvestingPro.
The information provided in this article is based on a press release statement.
In other recent news, MacKenzie Realty Capital, Inc. has secured a $10 million line of credit with an affiliate, Patterson Real Estate Services, LP, to enhance its financial flexibility. The credit line, approved by the Board of Directors, carries a 10% interest rate and a 2% origination fee on each draw, with a maturity date set for June 1, 2026. This strategic move aims to provide the company with additional capital for opportunities and to manage financial obligations effectively. Additionally, MacKenzie Realty announced plans to update its stockholders through letters, addressing dividend payments and other company matters. These communications are part of the company’s transparency efforts, as stated in their latest 8-K filing. Furthermore, MacKenzie Realty has amended its Articles of Amendment and Restatement and bylaws following a Special Meeting of Stockholders. The changes include modifications to corporate governance and stockholder meeting procedures, aligning with Maryland General Corporation Law. These amendments, effective as of January 10, 2025, are part of the company’s ongoing efforts to update its governance practices.
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