Peakstone Realty Trust Announces Tax Treatment of 2023 Distributions
- None.
- The reverse share split may lead to confusion for shareholders and requires them to consult their tax advisor for specific tax treatment.
Insights
Understanding the tax implications of REIT distributions is essential for shareholders to manage their investment portfolios effectively. Peakstone Realty Trust's announcement of the tax treatment for its 2023 distributions indicates that all distributions for the year are classified as ordinary income, with no portion allocated to capital gains or return of capital. This classification has significant tax consequences, as ordinary income is taxed at the individual's income tax rate, which is typically higher than the capital gains tax rate.
For shareholders, this means that the entire distribution amount of $0.525 per share will be taxable as ordinary income. It's important to note that the absence of capital gains distributions could suggest that the REIT's properties have not been sold at a profit, or the profits have been reinvested back into the property portfolio. Moreover, the lack of nondividend distributions (return of capital) implies that the REIT is generating enough income to cover the distributions, rather than returning the investors' own capital back to them.
The announcement of a reverse share split by Peakstone Realty Trust is a strategic move that can have several financial implications. Typically, a reverse share split is executed to boost the stock price by reducing the number of outstanding shares, which can make the stock more attractive to institutional investors and improve perceptions of the company's value. However, it does not inherently change the company's market capitalization or the value of individual shareholders' investments.
The one-for-nine reverse share split may indicate that the company is seeking to stabilize the stock price or meet the New York Stock Exchange's listing requirements. It is crucial for investors to understand that the distribution amounts declared prior to the reverse split have not been adjusted, which could affect the perceived yield per share. Investors should assess how this reverse split aligns with their investment goals and the potential liquidity impacts.
The focus of Peakstone Realty Trust on single-tenant industrial and office properties is noteworthy in the current economic climate. The industrial real estate sector has been robust, driven by the growth of e-commerce and the need for distribution centers, which may bode well for Peakstone's portfolio performance. Conversely, the office property market has faced challenges due to shifts in work habits post-pandemic.
Investors should consider the company's property focus when evaluating the potential stability and growth of distributions. The quality and vintage of Peakstone's portfolio could be a differentiating factor in its ability to attract and retain tenants, thus impacting its revenue stability. The REIT's strategy in managing these property types, along with macroeconomic factors, will influence its operational performance and, consequently, its ability to maintain or increase future distributions.
| Ordinary Income |
Capital Gains | ||||||||||||||||
| Record Date | Payable Date | Total 2023 | Total (Box 1a) | Total (Box 2a) | Unrecapt’d Sec 1250 (Box 2b) |
Nondividend Distributions (Box 3) |
|||||||||||
| Distributions | |||||||||||||||||
| Per Share | |||||||||||||||||
| (1a + 2a + 3) | |||||||||||||||||
| 09/30/2023 | 10/17/2023 | $ | 0.225 |
$ | - |
$ | - |
$ | - |
$ | 0.225 |
||||||
| 06/30/2023 | 07/17/2023 | $ | 0.225 |
$ | - |
$ | - |
$ | - |
$ | 0.225 |
||||||
| 05/02/2023 | 05/12/2023 | $ | 0.075 |
$ | - |
$ | - |
$ | - |
$ | 0.075 |
||||||
| Totals | $ | 0.525 |
$ | - |
$ | - |
$ | - |
$ | 0.525 |
|||||||
| Reverse Share Split (1) | |||||||||||||||||
| 02/01/2023 - 02/28/2023 | 02/24/2023 | $ | 0.007671 |
$ | - |
$ | - |
$ | - |
$ | 0.007671 |
||||||
| 01/01/2023 - 01/31/2023 | 02/01/2023 | $ | 0.029726 |
$ | - |
$ | - |
$ | - |
$ | 0.029726 |
||||||
| 12/01/2022 - 12/31/2022 | 01/03/2023 | $ | 0.029726 |
$ | - |
$ | - |
$ | - |
$ | 0.029726 |
||||||
| Totals | $ | 0.067123 |
$ | - |
$ | - |
$ | - |
$ | 0.067123 |
|||||||
(1) On March 10, 2023, the Company completed a one-for-nine reverse share split with respect to each class of its common shares, converting every nine shares of the Company’s issued and outstanding shares of each class into one share of such class (the “Reverse Share Split”). On April 13, 2023, the Company’s common shares, other than Class E, were converted into Class E common shares and all Class E common shares became listed on the New York Stock Exchange as “common shares”. The information reported for distributions paid prior to the Reverse Share Split during January 2023 through February 2023 reflect the distribution amounts as declared and have not been adjusted for the Reverse Share Split.
The Company’s Forms 8937 (which include distribution and return of capital information) are available in the Investors section on Peakstone’s website: https://investors.pkst.com/investors/stock-info/Tax-Information/default.aspx.
Shareholders are advised to consult their tax advisor as to their specific tax treatment of Peakstone’s distributions.
About Peakstone Realty Trust
Peakstone Realty Trust (NYSE: PKST) is an internally managed real estate investment trust (REIT) that owns and operates a high-quality, newer-vintage portfolio of predominantly single-tenant industrial and office properties. These assets are generally leased to creditworthy tenants under long-term net lease agreements with contractual rent escalations and are situated in primarily high-growth, strategic coastal and sunbelt markets.
Additional information is available at www.pkst.com.
Forward-Looking Statements
This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We intend for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions. The forward-looking statements contained in this document reflect our current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause our actual results to differ significantly from those expressed in any forward-looking statement. The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: general economic and financial conditions; market volatility; inflation; any potential recession or threat of recession; interest rates; recent and ongoing disruption in the debt and banking markets; occupancy, rent deferrals and the financial condition of our tenants; whether work-from-home trends or other factors will impact the attractiveness of industrial and/or office assets; whether we will be successful in renewing leases as they expire; future financial and operating results, plans, objectives, expectations and intentions; expected sources of financing, including the ability to maintain the commitments under our revolving credit facility, and the availability and attractiveness of the terms of any such financing; legislative and regulatory changes that could adversely affect our business; our future capital expenditures, operating expenses, net income, operating income, cash flow and developments and trends of the real estate industry; whether we will be successful in the pursuit of our business plan, including any dispositions; whether we will succeed in our investment objectives; any fluctuation and/or volatility of the trading price of our common shares; risks associated with our dependence on key personnel whose continued service is not guaranteed; and other factors, including those risks disclosed in “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q filed with the
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Source: Peakstone Realty Trust
FAQ
What is the ticker symbol for Peakstone Realty Trust?
What is the total 2023 distribution per share for PKST?
When was the reverse share split completed for PKST?
Where can shareholders find the Company’s Forms 8937 for tax information?
What are shareholders advised to do regarding the tax treatment of Peakstone’s distributions?
