Another Richmond company has its eye on the stock market.
Medalist Properties, a downtown private equity firm that invests in commercial real estate, is in the process of creating a REIT that will look to raise up to $30 million through a public stock offering using new federal rules that make certain capital raises easier, faster and cheaper, and open them up to average investors.
Through Medalist Diversified REIT, the company disclosed in recent SEC filings that it will use the new Regulation A+ process to create a publicly traded REIT that will initially purchase four properties scattered around the Southeast, including two shopping centers, a hotel and a large industrial complex.
The properties are currently owned by other Medalist entities, which previously raised capital from investors through more traditional private placements.
The REIT’s first deal would be to acquire the Shops at Franklin Square, a 134,000-square-foot retail property in Gastonia, North Carolina. It expects to pay $20.5 million, including $5.12 million in cash, plus the assumption of debt. The property is anchored by Ashley Furniture, HHGregg and Monkey Joe’s and is about 88 percent occupied.
Depending on its success in hitting its fundraising goal, which SEC filings peg at a range of $7 million to $30 million, the REIT would then look to purchase: the 127-room Greensboro Airport Hampton Inn in Greensboro, North Carolina; the Food Lion-anchored Warsaw Village shopping center in Warsaw, Virginia; and Arrowridge I, II, III and IV, a 194,553-square-foot industrial property in Charlotte, North Carolina.
Medalist Properties was founded in 2003 by Bill Elliott and Tim Messier. Headquartered downtown at 11 S. 12th St., it serves as an umbrella company to several arms that carry out fund management, property management and investment banking functions.
Including the four properties that would be transferred to the REIT, Medalist Properties currently owns a total of 10 properties in Virginia, North Carolina, South Carolina and Georgia, according to its website. Its lone local property is the John Rolfe Place office condo strip in the West End.
Messier said the company would not comment, as it is still in the process of getting clearance from the SEC to begin its offering.
SEC filings describe Medalist Diversified REIT as being created to “acquire, reposition, renovate, lease and manage income-producing properties.”
Following these first four deals, the company would look to make additional acquisitions over time, the filings state.
“We believe that in the long-term, there will be a consistent flow of properties in our target markets for purposes of acquisition, repositioning, renovation, rehabilitation, or leasing and managing which we expect will enable us to continue our platform into the foreseeable future.”
The new rules would allow Medalist to create more than one REIT and issue multiple offerings in relatively short amounts of time. Companies are limited to raise $50 million in any trailing 12-month period.
Medalist’s efforts are similar to that of Allegiancy, a local company that last week began taking its Reg A+ offering out to investors in an attempt to raise $30 million.
The process, which has been dubbed a mini-IPO or IPO-lite, was created through the JOBS Act in 2012 and finalized by the SEC last year. It’s designed to help smaller companies raise capital and to allow non-accredited investors to buy in. The new rules also lift restrictions on advertising an offering.