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Medalist Diversified REIT, Inc. (NASDAQ:MDRR), a small-cap REIT with a market capitalization of $18.44 million, has completed the acquisition of a commercial property occupied by United Rentals (NYSE:URI), Inc. in Huntsville, Alabama, for $3.145 million. According to InvestingPro data, the company maintains strong liquidity with a current ratio of 4.06, indicating solid financial flexibility. The transaction, which closed on Monday, involved the issuance of 251,600 operating partnership units and a cash payment of $42,446 to cover transaction costs.
The property, located at 376 Dan Tibbs Road NW, spans 7,500 square feet and was acquired from Dionysus Investments, LLC, through a contribution agreement. The purchase price was based on an independent appraisal of the property’s value and the closing price of Medalist Diversified REIT’s common stock on December 13, 2024. The company boasts an impressive gross profit margin of 77.19%, though InvestingPro analysis indicates it’s currently trading at a high EBIT multiple, suggesting potential overvaluation.
Additionally, the rights to the operating partnership units were assigned to BET Trust by the seller. These units are redeemable for cash or common stock of the company, subject to stockholder approval.
This strategic acquisition expands Medalist Diversified REIT’s portfolio in the real estate investment trusts sector. Notably, the company has achieved a perfect Piotroski Score of 9, as reported by InvestingPro, indicating strong financial health fundamentals. The details of the transaction were outlined in an 8-K filing with the Securities and Exchange Commission, which also included financial statements and pro forma financial information related to the property.
The company’s CEO, Frank Kavanaugh, has a connection to the seller, as he is a manager of Fort Ashford (NYSE:AINC) Funds, LLC, which is the manager of Dionysus Investments, and a trustee of BET Trust. This relationship was disclosed in the SEC filing.
The operating partnership units were issued in a private transaction exempt from registration under the Securities Act of 1933, pursuant to Section 4(a)(2) of the Act.
This report is based on a press release statement filed with the SEC.
In other recent news, Medalist Diversified REIT has completed the acquisition of a real estate asset in Bowling Green, Kentucky. The transaction involved a purchase price of $2.62 million, excluding closing costs, for the property located at 2545 Scottsville Road. The acquisition was financed through a combination of cash and equity, with Medalist issuing 209,600 operating partnership units valued at approximately $12.50 each. Additionally, the seller assigned the rights to these units to the BET Trust, which can redeem them for cash or shares of Medalist’s common stock, subject to stockholder approval. The seller’s general partner, Fort Ashford Funds, LLC, is managed by Frank Kavanaugh, who also serves as CEO of Medalist Diversified REIT, indicating a connection between the seller and the company’s management. This transaction marks a strategic expansion of Medalist Diversified REIT’s real estate portfolio. The company plans to file financial statements for the newly acquired property and related pro forma financial information in an amendment to the Current Report on Form 8-K by April 5, 2025. The acquisition details and related agreements are documented in the SEC filing.
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