Primary Objectives and Investment Strategy
ARC Daily NAV’s primary investment objectives are to preserve and protect capital, provide attractive and stable cash distributions, and increase the value of assets in order to generate capital appreciation. In an effort to meet these objectives, ARC Daily NAV intends to employ the following investment strategy:
- Free-Standing, Single Tenant: We will pursue an investment strategy focused on acquiring a diversified portfolio of free-standing single-tenant bank branch, convenience store, retail, office and industrial properties net leased long-term to investment grade and other creditworthy tenants1, which are located in the United States and the Commonwealth of Puerto Rico.
- Real Estate Related Assets: Although we expect our portfolio will consist primarily of free-standing, single-tenant properties, we will not forgo opportunities to invest in other types of real estate investments that meet our overall investment objectives. We may also further diversify our portfolio by making loans on single-tenant net-leased properties.
- Discount to Replacement Cost: We intend to target properties valued at a discount to replacement cost using current market rents, with potential for appreciation largely through rent growth.
- Long-Term Leases: We intend to acquire real estate leased long-term with minimum, non-cancellable lease terms of ten or more years.
- Low Leverage: We intend to finance our portfolio at a target leverage level of 50% loan-to-value2 (calculated after the close of this offering and once we have invested substantially all the proceeds of this offering).
- Monthly Distributions: We intend to pay distributions monthly.3
- Total Returns: We will seek to increase total returns to our stockholders through a combination of current income and realized appreciation.
- Exit Strategy: We intend to sell our assets, sell or merge our company, or list our company within three to six years after the end of this offering.4
There can be no assurance that we will achieve any of our stated objectives and they may be changed without stockholder consent.
|1||“Investment grade” is a determination made by major credit rating agencies, and “credit-worthy” tenants are as determined by the Company.|
|2||Our charter permits up to 75% leverage. If we have insufficient cash flows to service our debts or if any of our properties are foreclosed upon, our ability to pay distributions to our stockholders will be adversely affected which could result in our losing our REIT status and would decrease the value of your investment.|
|3||Distributions are not guaranteed. We may not be able to pay or maintain distributions and they are subject to change at any time. Until we generate operating cash flows sufficient to pay distributions, we may pay distributions from the net proceeds of our offering, from our borrowings, or from other sources. Payment of fees to our advisor as well as the payment of operating expenses will reduce cash available for distributions.|
|4||If our Board does not decide to pursue a liquidity event, or if we fail to receive stockholder approval for a liquidity event, the Company could operate indefinitely.|