That number says more than any press release.
The new rate equates to $0.62 a year, or about 5.5% of the REIT’s Sept. 30 net asset value per share of $11.3303, according to the company. The prior $0.68 annual rate equated to about 6% of that NAV. I read this as a board trading current income for long-term capital appreciation, a signal that the REIT’s growth ambitions now outweigh its retail payout obligations.
Cottonwood’s board said the reduced rate places greater emphasis on long-term capital appreciation while continuing to provide current income, and that aligning distributions more closely with earnings “strengthens distribution coverage.” Easy to announce, harder to underwrite.
The reduction follows an earlier step-down: Cottonwood paid $0.73 per share annually from January 2023 through July 2025 before phasing the rate down to $0.68 in connection with its merger with RealSource Properties.
Cottonwood said it will use term-loan proceeds to finance an acquisition, pay related fees and expenses, and reduce the principal balance of an outstanding loan by $25.4 million. The facility matures Oct. 16, 2029, with two optional 12-month extensions.
The aggregate purchase price is about $519.9 million, including debt to be assumed or repaid at closing, payable in cash and operating partnership units. The combined Mandel portfolio totals 2,259 units with average occupancy of 96.4% and average rent of $1,926, according to Cottonwood.