Former Nontraded REIT Investors Can Now Trade NHP Shares on Nasdaq
Investors who bought into National Healthcare Properties Inc. when it was a nontraded real estate investment trust can sell their shares on Nasdaq for the first time, after the company’s Class A IPO shares automatically converted into common stock on Oct. 18.
All 44,275,000 outstanding Class A shares converted into common stock on a one-for-one basis, leaving 72,910,570 common shares outstanding. The combined common stock began trading on the Nasdaq Global Market under the ticker NHP on Oct. 19, and the Class A shares ceased trading.
The conversion took effect 180 days after the company priced its April IPO, under the terms of the Class A shares. The company said the conversion did not change the economic interests of former Class A holders, who had identical rights to common stockholders on dividends and in liquidation.
The company sold 38.5 million Class A shares in the IPO and another 5.775 million shares through the underwriters’ overallotment option, bringing total gross proceeds to about $531.3 million.
The roughly 28.6 million shares that were not part of the IPO, largely held by the REIT’s original retail investors, had no listed market until the conversion. When National Healthcare Properties priced its IPO at $12 a share in April, the company said the conversion would be the first point at which all of its common stock, including shares held by original investors, would trade publicly.
NHP shares closed at $14.81 on Oct. 19, their first day of trading as a single class, down about 2% from the Class A shares’ previous close. Shares closed at $15.27 on Oct. 26.
The Oct. 19 close was about 85% below the $100-per-share equivalent original investors paid. Retail investors bought shares at $25 each from 2013 to 2014, when the company was American Realty Capital Healthcare Trust II Inc., later renamed Healthcare Trust Inc. A 4-for-1 reverse stock split in September 2024 restated that price to $100. The close was also about 54% below the $32.15-per-share estimated net asset value the board last approved, as of Dec. 31, 2024.
Before the conversion, holders of the nontraded shares had limited options. In June, MacKenzie Capital Management launched a mini-tender offer for up to 150,000 nontraded NHP shares at $7.27 each, about 47% below the Nasdaq price of the Class A shares at the time. The company’s board declined to make a recommendation on the offer.
Since listing, National Healthcare Properties has been repositioning toward senior housing. In September, it closed the first 30 properties in a $528 million sale of 86 outpatient medical facilities and repaid about $119 million of secured debt. The company has said it expects senior housing operating properties to account for roughly 60% of cash net operating income after the sale, up from 37% at the time of the IPO.
New York-based National Healthcare Properties owns a portfolio of senior housing and outpatient medical properties.
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