MacKenzie Offers to Buy Starwood REIT Shares at 22% Discount to NAV

MacKenzie Realty Capital Inc. – a real estate investment trust which began trading last fall on the Nasdaq Capital Market under the ticker symbol MKZR – announced a new tender offer to acquire shares of the non-traded Starwood Real Estate Income Trust Inc., offering liquidity to investors at a steep discount to the REIT’s current net asset value.

MacKenzie has launched a tender offer to purchase up to 150,000 Class S shares of SREIT for $16.25 per share – representing a 22% discount to Starwood’s estimated NAV of $20.76 as of Aug. 31, 2025.

The offer is framed as a solution for SREIT shareholders facing limitations in withdrawing capital. Starwood’s share redemption program has been oversubscribed, fulfilling only about 4% of each stockholder’s repurchase requests in recent months. MacKenzie argues that its offer provides an immediate exit for all shares, avoiding a multi-year wait at the current redemption rate.

This latest bid continues a trend for MacKenzie. The REIT previously acquired over $3 million in SREIT shares through tender offers in July 2024 (at $17.50) and February 2025 (at $15.30). The strategy appears to be profitable, as MacKenzie and its affiliates saw approximately 6,750 of their previously acquired shares redeemed by Starwood in September 2025 at the then-current NAV of $20.76.

If fully subscribed, the offer represents approximately $2.4 million in capital outlay for shares Starwood currently values at about $3.1 million – implying a potential spread of roughly $675,000 based on NAV.

Third-party offers such as MacKenzie’s are often discouraged by REIT sponsors, but remain one of the few liquidity options for investors seeking rapid liquidity.

Separately, MacKenzie Real Estate Advisers LP, the company’s external adviser, purchased an additional 15,000 shares of MacKenzie, bringing total insider and affiliate ownership above 7%.

“We have purchased another block of the company’s shares because we still believe it is a good investment and that the value of the shares substantially exceeds the market price,” said Robert Dixon, chief executive officer of the REIT. “We believe the company has turned the corner as evidenced by its continued trend toward AFFO profitability, with the most recent annual results showing an 84% improvement in that category.”

On Sept. 30, MacKenzie reported that construction of Aurora at Green Valley, a multifamily development in Fairfield, Calif., is complete and leasing has begun.

The REIT said 36% of the project’s units are already leased.

The milestone supports MacKenzie’s West Coast-focused strategy, which aims for a real property portfolio split of approximately 50% multifamily and 50% boutique Class A office assets.

The company’s recent actions are supported by a trend of improving operating metrics, as highlighted by its financial results for the fiscal year ended June 30, 2025. The REIT, which has a current dividend yield of about 39.5%, posted net revenues of $22.06 million, marking a significant 40% increase from $15.74 million in the prior year.

Despite the revenue growth, MacKenzie recorded a wider net loss of $23.97 million, up from an $11.22 million loss in fiscal 2024. This loss was primarily attributable to non-cash impairment and depreciation charges totaling nearly $21 million.

The company, however, pointed to substantial operational improvements in key REIT metrics:

• Funds from operations improved 53%, narrowing the negative FFO to $2.32 million from negative $4.93 million in the prior year.
• Adjusted Funds From Operations, or AFFO, saw an even greater improvement, narrowing the negative AFFO by 84% to $0.69 million from negative $4.25 million in the prior year.

Previously reported by AltsWire in July 2025, MacKenzie’s board approved a 1-for-10 reverse stock split aimed at increasing the per-share trading price of the company’s common stock to ensure continued compliance with the Nasdaq Capital Market’s minimum bid price requirement. The stocked closed at $5.47 today.

MacKenzie, founded in 2013, is a West Coast-focused REIT that seeks to invest at least 80% of its total assets in real property, and up to a maximum of 20% of its total assets in illiquid real estate securities. Its current portfolio includes interests in four multifamily properties, eight office properties, and two multifamily developments.

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