JZ Capital Partners (JZCP) invests in US and European micro-cap companies and US real estate. The company has this morning announced that it has begun receiving preliminary appraisals for its real estate portfolio assets for the valuation period as of February 29, 2020. In line with the company’s previously announced expectation in its interim results, released on November 27, 2019 (click here to read more on this and here for an article written by QuotedData analyst, James Carthew, on the subject), certain newly received appraisals represent materially lower valuations.
Real estate portfolio likely to be written-down by around $102m
Although JZCP has not received all of its annual appraisals as of this announcement, the Fulton Mall and Design District appraisals indicate that the company will likely experience a write-down of its real estate net asset value of approximately $102m from its December 31, 2019 NAV. Including three other newly received appraisals, which in total represent an additional approximately $6.0m write-down, the company expects to take a provision of approximately $108m in its January 31, 2019 NAV, subject to receiving additional appraisals in the coming two weeks. This provision is in addition to the write-downs previously taken and announced of $62 and $18m regarding the company’s investments in Design District and Greenpoint, respectively. As a consequence of these newly received appraisals, the company’s investments in Fulton Mall and Design District will be written down to nil.
As stated above, the valuation process as of February 29, 2020 is unfinished, and the company has yet to receive several appraisals from properties which represent a significant portion of JZCP’s NAV. The company will issue further reports regarding the updated valuations of these properties as necessary.
JZCP’s manager continues to look to realise value from the investment portfolio in order to pay down the company’s debt, in the first order, and make capital distributions to shareholders.
JZCP: JZ Capital Partners expects to write-down real estate by around $102m