Highlands REIT, Inc. 8-K

What Happened
Highlands REIT announced (Form 8‑K filed May 12, 2026) that its Board approved an estimated per‑share value of its common stock equal to $0.29 on a fully diluted basis, effective March 31, 2026. The estimate was based on a third‑party valuation by Real Globe Advisors, LLC (report dated May 4, 2026) using a net asset value (NAV) approach that largely relied on discounted cash flow (DCF) analyses for real estate assets. The Audit Committee reviewed and recommended, and the Board unanimously adopted, the $0.29 estimate. Fully diluted shares used in the calculation: 722,202,902.

Key Details

• Real Globe’s pre‑cost NAV range (DCF sensitivity) was $0.34 – $0.42 per share, midpoint $0.38; the company subtracted $0.05 of estimated corporate‑level transaction costs to arrive at $0.29.
• Component per‑share amounts (rounded): Real properties $0.49; Working capital $0.02; Total assets $0.51; Fair value of debt $(0.17); NAV before corporate costs $0.34.
• Valuation methods & assumptions: DCF over ~10 years for most assets; Real Globe used market‑supported discount and terminal capitalization rates (midpoint terminal cap ~6.56%, discount rate ~7.43% for DCF assets). Property‑type weighted averages included higher cap/discount rates for retail and flex office and lower rates for multifamily.
• Board cited difficulties transacting assets, weak Denver multifamily conditions, leasing risk, and lack of comparable sales in setting the estimate below the midpoint.

Why It Matters
This is an internal, third‑party supported estimated NAV intended to assist broker‑dealers and plan administrators with reporting — it is not a market price, an offer to buy or sell shares, or a guarantee of proceeds on a sale or liquidation. The estimate includes a company‑provided deduction for potential transaction costs related to a future liquidity event; actual costs, market conditions, or sale outcomes may differ materially. Investors should view the $0.29 figure as a point‑in‑time estimate (effective March 31, 2026) and not a statement of the price at which shares would trade if listed or sold. The filing also contains standard forward‑looking disclaimers and cautions about risks that could change valuation.