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MEDALIST DIVERSIFIED
REIT, INC.
(Name of Registrant as Specified in its Charter)
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Medalist
Diversified REIT, Inc. RELEASES UPDATE FROM interim CEO and president
RICHMOND, Va., August 23, 2023--Medalist Diversified
REIT, Inc. (NASDAQ: MDRR) (the "Company" or "Medalist"), a Virginia-based real estate investment trust that specializes
in acquiring, owning and managing commercial real estate in the Southeast region of the U.S., released today a letter from Francis P.
Kavanaugh, the Company’s interim CEO and President, providing an update on the Company’s activities during the first 30 days
of his tenure.
Dear Shareholders,
Having reached my 30th day as interim CEO of Medalist Diversified REIT,
Inc. (“MDRR”), I'm pleased to present an update on our strategic progress, tenant relationships, and promising trends in the
retail industry that I believe bode well for our future.
Property Overview
- Southeast geographic focus
- Nearly 1 million square feet across 5 shopping centers and 3 flex/industrial
assets as of July 31, 2023
- Assumable debt of $61 million of July 31, 2023
- 4.2% weighted average interest rate; 5.8 year weighted average debt
maturity as of July 31, 2023
Leasing Activity
Leasing remains central to our strategy, with recent engagements that
signal our alignment with market demands:
- Parkway Center: Achieved full occupancy with a newly-signed 2,569
square foot lease on August 7, 2023
- Greenbrier Business Center: A new 6,770 square foot lease brings
occupancy to 98% as of August 23, 2023
- Salisbury Marketplace – Family Dollar: Secured an 8,470 square
foot lease renewal for 10 years on July 28, 2023
- Lancer Center – Big Lots: 10-year, 28,257 square foot lease
renewal on June 27, 2023
- Ashley Plaza – CitiTrends: 5-year, 14,880 square foot lease
renewal on June 7, 2023
We believe these high-profile new leases and lease renewals demonstrate
our commitment to fostering sustainable relationships and securing long-term stability.
Retail Sector Resilience
According to an article in the Wall Street Journal on August 22, 2023,
the retail real estate market has proven resilient, with remarkable trends including:
- Retail Availability at Record Lows: The nationwide availability rate
now stands at 4.8%, the lowest in 18 years.
- Positive Rent Growth: The average asking rent in the U.S. increased
by 6.3% since Q2 2020.
- Resilience Despite Economic Fluctuations: Despite predictions of
physical retail’s decline due to online sales, brick-and-mortar locations are flourishing. Retail’s strength is largely the
result of a sharp drop in retail construction since the 2008-2009 financial crisis and digitally native companies are even opening physical
stores.
- Shift Towards Suburban Locations: The rise of remote work and suburban
living has driven foot traffic to local stores and shops, benefiting retail property owners and landlords in these areas.
This resilience signals opportunities for MDRR to further our retail
investments, capitalizing on emerging consumer behaviors and the adaptability of the retail sector.
Cost Efficiency & Alignment
The decision to terminate our external manager and eliminate other
positions, thus saving nearly $1 million per year, was a key step in enhancing our financial position.
CEO Compensation
To signify my commitment to MDRR, I have agreed to forgo any compensation
for my service as a director and executive officer of MDRR during the previously announced six-month suspension of dividends, which took
effect on July 12, 2023.
Capital Financing Strategy & Equity Purchases
Our management and directors’ collective purchase of shares of
MDRR’s common and preferred stock in August 2023 totaling approximately $564,000 is a substantial investment, underscoring our belief
in MDRR's potential.
Focused Growth, Acquisitions, and Values
Our growth strategy emphasizes acquisitions that resonate with our
newly adopted core values of Seamless Alignment and Value-Driven. We plan to forge a sustainable model that reflects our ambitions and
respects the dynamic landscape.
Upcoming Engagement & Collaboration
Our upcoming annual meeting of shareholders on September 15, 2023 presents
an essential platform for dialogue and collaboration. We highly value your insights.
Team Unity & Passion
Our team, unified and motivated, embodies our core values. Together,
we're working to craft a transformative path forward.
Closing Thoughts & Regular Engagement
We are committed to providing regular updates to our shareholders.
Your feedback and partnership drive our progress.
In closing, I want to express my gratitude for your continued trust
and confidence in our shared journey.
Sincerely,
Francis P. Kavanaugh
Interim CEO and President, Medalist Diversified REIT, Inc.
About Medalist Diversified
REIT
Medalist Diversified
REIT Inc. is a Virginia-based real estate investment trust that specializes in acquiring, owning and managing value-add commercial real
estate in the Mid-Atlantic and Southeast regions. The Company’s strategy is to focus on value-add and opportunistic commercial
real estate which is expected to provide an attractive balance of risk and returns. The Company seeks to maximize operating performance
of current properties by utilizing a hands-on approach to property management while monitoring the middle market real estate markets
in the southeast for acquisition opportunities and disposal of properties as considered appropriate. For more information on Medalist,
please visit the Company website at www.medalistreit.com.
Forward-Looking
Statements
This
press release contains statements that are “forward-looking statements” within the meaning of the Private Securities Litigation
Reform Act of 1995 and other federal securities laws. Forward looking statements are not historical and are typically identified by such
words as “believe,” “expect,” “anticipate,” “intend,” “estimate, “may,”
“will,” “should” and “could” and include statements about our corporate strategy. Forward-looking
statements are based upon the Company’s present expectations but are not guarantees or assurances as to future developments or results.
Factors that may cause actual developments or results to differ from those reflected in forward-looking statements include, without limitation,
adverse changes in the pricing of the Company’s assets, disruptions associated with management internalizations, increased costs
of, and reduced availability of, capital and those included in the Company’s most recent Annual Report on Form 10-K and in the Company’s
other filings with the Securities and Exchange Commission. Investors should not place undue reliance upon forward-looking statements.
The Company disclaims any obligation to publicly update or revise any forward-looking statements to reflect changes and new developments
except as required by law or regulation.
Contact
Brent Winn
Medalist Diversified REIT, Inc.
brent.winn@medalistprop.com
Medalist Diversified REIT (NASDAQ:MDRR)
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