A local real estate firm is getting closer to the stock market.
Medalist Diversified REIT, a newly created real estate investment trust from downtown-based private equity firm Medalist Properties, has sold $8.7 million worth of shares in a public offering, on its way to a $50 million target.
Surpassing the $8 million mark puts Medalist over the minimum threshold for companies raising capital through a Regulation A+ offering, a method created by the 2012 JOBS Act to allow smaller businesses to raise capital through public offerings. The program allows for a minimum raise of $8 million and a maximum of $50 million.
Medalist Properties, co-founded in 2003 by Tim Messier and Bill Elliott, invests in commercial real estate in the Mid-Atlantic and Southeast. They’ll use the new REIT to continue that model.
The REIT began raising capital in August 2016 with a $50 million cap, which it has until January 2018 to reach, Messier said. It initially prepared for a raise of up to $30 million, but upped its target after investor interest grew.
Hitting the minimum Regulation A+ amount allows Medalist to close out the offering and be a publicly traded company, even without reaching $50 million. But the firm is continuing the raise, with its sights set next on $10 million, which would allow it to trade on the OTCQX stock exchange.
The company plans to use proceeds from the offering to purchase four properties around the Southeast, including two shopping centers, a hotel and a large industrial complex, according to SEC filings.
“We’re using the new funds already,” Messier said. “Last Friday we purchased a shopping center in Gastonia, North Carolina, and we have our eye on a Hampton Inn there.”
Messier said investors in the offering thus far have come from both Richmond and around the country.
The company is using law firm Kaplan Voekler Cunningham & Frank, accounting firm Kieter and St. Louis-based underwriter Moloney Securities for the offering.
Medalist is based at 11 S. 12th St. in Shockoe Slip.