Procaccianti Hotel REIT A-Share NAV Falls 17% as Adviser Fee Cap Removed
The Class A stockholders of Procaccianti Hotel REIT saw their net asset value per share fall 17% in the past year – from $7.14 to $5.91 – while Procaccianti Hotel Advisors, the fund’s external adviser, will collect fees indefinitely since stockholders voted in January to remove the deadline that had been set to cap the arrangement.
The Cranston, R.I.-based nontraded real estate investment trust disclosed the annual NAV update this week. The valuation, conducted by Robert A. Stanger & Co. as of March 31, 2026, pegged the total portfolio – five hotels across the upper-midscale, upscale, and upper-upscale chain scales – at $109.3 million.
Class K and Class K-I stockholders, who hold a preferred liquidation position ahead of Class A holders, saw their NAV hold flat at $10.17 per share, the same as the prior year.
The Class A-share decline reflects the program’s capital structure. Under the terms of Procaccianti Hotel REIT’s charter, NAV is distributed first to Class K and Class K-I stockholders at their $10.00 liquidation preference, second to the payment of any deferred and unpaid adviser fees including accrued interest, and third to Class A stockholders at their own $10.00 liquidation preference, with any remaining upside split among share classes thereafter. As the overall NAV has eroded to $58.5 million from $59.2 million a year earlier, the A-share position has absorbed the compression.
Compounding the Class A-share picture is the adviser fee arrangement stockholders approved in January. Procaccianti Hotel Advisors – an affiliate of the program’s sponsor, Procaccianti Companies Inc. – had been operating under an agreement that would have stopped accruing asset management fees on Aug. 13, 2026, the fifth anniversary of the date the program terminated its public offering. Under a second amended and restated advisory agreement approved by stockholders in January, that deadline was removed. Interest on deferred acquisition and disposition fees, also set to cease accruing at the same date, will now continue to accumulate as well.
As of March 31, 2026, the company carried $1.24 million in deferred acquisition fees and $186,484 in accrued asset management fees and interest – obligations that sit ahead of Class A stockholders in any liquidation or liquidity event.
The program has no announced path to a liquidity event. Its public offering closed in 2021; it holds five hotels and has made no acquisitions. The first quarter of 2026 produced a net loss attributable to common stockholders of $1.86 million on revenue of $5.1 million, with room revenue down from $5.2 million in the same quarter of 2025.
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