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  • Report:  #976283

Complaint Review: Apple Reit 6

Apple Reit 6 Pending Sale/Merger with Blackstone, Richmond, Virginia

  • Reported By:
    Dee W — Manchester New Jersey United States of America
  • Submitted:
    Fri, November 30, 2012
  • Updated:
    Fri, November 30, 2012
  • Apple Reit 6
    814 East Main St.
    Richmond, Virginia
    United States of America
  • Phone:
    804-344-8121
  • Category:

Investors Beware!! In my opinion, the pending sale of Apple Reit Six to Blackstone is not in your best interests.  If you have shares in apple six, as I do, beware of the sale.  What they are offering is a fire sale. Investors who want to get their money out, do not look at the price.  This was an illiquid investment that cost $11.00 per share.  It has paid a handsome dividend 7.2-8.2%  since its inception.  Other Apple Reits have sold for much more.  The last Apple 5 was over $14.00.  The terms of this sale is $11.10 per share OF which you will only be paid $9.20 cash and be given another (brand new, formed just for this sale) illiquid
stock valued at $1.90 that will pay a 7% dividend.  That's .2% less than you receive now.  On top of that, they are suspending all dividends till the sale is over,  possibly 3-4 months.  So if I read this right,  Glade Knight, (who by the way, will receive a nice real estate commission on this sale, as he is the realtor), is offering me $11.10 and forcing me to take another unknown illiquid stock while holding back my dividends for at least 3 months. Plus I'll have to keep my IRA Roth account open and pay $35.00 to administer it to David Lerner Assoc.  Am I crazy to vote yes for this?  

For example:  Say I have 20,000 shares of Apple Six.  It's value at $11.00 is $220,000 of which I receive 7.2% or $15,840.00 a year or $1320.00 a month.  Its sold.  I get to pay taxes on $222,000.00 but only have $184,000.00 in cash and another illiquid stock that's supposed to be worth $38,000.00 that will pay me a dividend of $2660.00 a year or $221.66 a month.  Meanwhile I lost 3 months worth of dividends totaling $3960.00.  So this good deal is that I lose $3960.00 in dividends (IF it closes in 3 months, more if longer) and you say I make a profit of $2,000.00 on the sale ($11.10/$11.00) and pay taxes on the whole gain.
Thanks, I think I'll pass and keep my dividends coming.  All who own Apple Six, think twice before saying yes on your proxy to this fire sale.

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