Elme Communities, a multifamily REIT in the process of liquidating and shuttering operations, is nearing the finish line.
But, for the second time this year, the dissolving Bethesda-based REIT is lowering expectations on how much its shareholders will receive when it completes the process.
Elme Communities’ 1,222-unit Riverside Apartments at 5860 Cameron Run Terrace in Alexandria is one of the properties the REIT has under a purchase and sale agreement.
Elme now expects to pay out between $16.74 and $17.02 per share, it announced Monday. The REIT also revealed it has purchase and sale agreements for four of its five remaining assets.
Elme said it lowered the estimate due to reductions in its predicted range of gross proceeds, which it says “have continued to be negatively impacted by current market conditions in the D.C. area.”
The properties are the 428-unit Elme Watkins Mill in Gaithersburg, the 374-unit Kenmore in Chevy Chase, the 307-unit 3801 Connecticut Ave. building in Van Ness and the massive 1,000-unit Riverside Apartments complex and adjacent developable land in Alexandria.
Together, the properties are expected to bring in gross proceeds of around $431.3M, the REIT said Monday. Elme plans to offload them by midyear.
In late January, Elme dropped its expected payout range from between $17.40 and $18.32 to between $17.02 and $17.47 per share.
With the disposition of those four assets, Elme Bethesda would be the sole remaining property in the REIT’s portfolio. Sale and marketing of the property are ongoing, Elme said in its first-quarter earnings report released Monday.
The REIT announced in August it planned to liquidate and had reached a deal to sell two-thirds of its portfolio, 19 properties, to Atlanta-based Cortland for $1.6B. Those properties included 16 in the D.C. area and three in Metro Atlanta.
It completed that sale in November. At the time, it also obtained a $520M senior secured-term loan from Goldman Sachs to complete the disposition of its other 10 remaining properties.
Elme has sold the first five of those 10 properties this year, including four multifamily communities and one office property. Those properties, which total around 1,000 units and 300K SF of commercial space, elicited gross proceeds of $199M, the REIT said in its earnings report.
Elme Communities underwent a rebrand and an asset shift in the years immediately following the pandemic. It sold nearly $1B of office and retail assets in 2021 in a shift to multifamily and then rebranded as Elme in 2022.
