Dividend Capital Diversified Property Fund (ZDPFEX)
To Continue —Below are important risk factors regarding Dividend Capital Diversified Property Fund (DPF). Use the button to continue on to the website.
An investment in DPF is subject to significant risks. Some of the more important risks are summarized below. A more detailed description of the risks associated with this offering is found in the section of the prospectus entitled “Risk Factors.” Investors should read and understand all of the risk factors before making a decision to invest in shares of DPF's common stock.
An investment in shares of DPF's common stock involves significant risks, including among others:
- There is no public trading market for shares of DPF’s common stock, and DPF does not expect that there will ever be a public trading market for its shares, so redemption of shares by them will likely be the only way to dispose of your shares.
- DPF’s Class A, Class W and Class I share redemption program generally imposes a quarterly cap on aggregate net redemptions of its Class A, Class W and Class I share classes equal to the amount of such share classes with a value of up to 5% of the aggregate net asset value (NAV) of the outstanding shares of such classes as of the last day of the previous quarter. DPF may also amend, suspend or terminate its share redemption program at any time. As a result, DPF’s shares have only limited liquidity and may become illiquid.
- A portion of the proceeds received in the public offering of Class A, Class W and Class I shares is intended to be used to redeem Class E shares, which will reduce the net proceeds available to retire debt or acquire additional properties, which may reduce its liquidity and profitability.
- The purchase and redemption price for shares of DPF’s common stock will be based on the NAV of each class of common stock and will not be based on any public trading market. DPF’s NAV will not represent DPF’s enterprise value and may not accurately reflect the actual prices at which DPF’s assets could be liquidated on any given day, the value a third party would pay for all or substantially all of DPF’s shares, or the price that DPF’s shares would trade at on a national stock exchange. The board of directors may amend DPF’s NAV procedures from time to time.
- Some of DPF’s executive officers and directors and other key personnel are also officers, directors, managers, key personnel and / or holders of an ownership interest in its advisor, its dealer manager, its property manager and / or other entities related to its advisor. As a result, they face conflicts of interest, including but not limited to conflicts arising from time constraints, allocation of investment opportunities and the fact that the fees its advisor will receive for services rendered to DPF will be based on DPF’s NAV, the procedures for which its advisor will assist its board of directors in developing, overseeing, implementing and coordinating.
- If DPF fails to maintain its status as a REIT, it would adversely affect its results of operations and its ability to make distributions to its stockholders.
- DPF's use of leverage increases the risk of loss on its investments.
- The amount of distributions DPF may make is uncertain, are not guaranteed and may be modified at the program’s discretion. DPF may pay distributions from sources other than cash flow from operations including, without limitation, the sale of assets, borrowings or offering proceeds (including the return of principal amounts invested). The use of these sources for distributions would decrease the amount of cash DPF has available for new investments, repayment of debt, share redemptions and other corporate purposes, and could potentially reduce your overall return and dilute the value of your investment in shares of DPF common stock. Because borrowed funds were used to pay distributions, the distribution rate may not be sustainable. Prior to 2012, DPF’s distributions have historically exceeded its cash flow from operations. However, for each year from 2012 through 2015 and for the quarters ended June 30, 2016 and September 30, 2016, distributions were funded solely from cash flow from operations. The distributions for the three months ended March 31, 2016 were funded 95.3% from cash flow from operations and 4.7% from other sources.
- The payment of fees by DPF to its advisor, its property manager and its dealer manager will reduce the cash available for distribution and will increase the likelihood that investors are unable to recover the amount of their investment in DPF.
- In connection with DPF’s offering, it incurs fees and expenses. In particular, DPF expects to incur a dealer manager and distribution fee which are expected to reduce the amount of distributions received by certain investors and as a result will lower the overall return to such investors. Also, DPF has and expects to continue to incur organizational and offering related expenses which reduce the overall cash flow of DPF and negatively impact its NAV and could negatively impact your overall return.
Investing in shares of our common stock involves a high degree of risk.
Investing in real estate assets entails certain risks, including changes in: the economy, supply and demand, laws, tenant turnover, interest rates (including periods of high interest rates), availability of mortgage funds, operating expenses and cost of insurance. This investment will offer limited liquidity options to investors. Real estate investment trusts (REITs) are not suitable for all investors.
This material contains forward-looking statements, including statements concerning investment objectives, strategies, other plans and objectives for future operations or economic performance that are based on DPF’s current expectations, plans, estimates, assumptions and beliefs that involve numerous risks and uncertainties, as described in more detail in the “Risk Factors” section of the prospectus and in this sales material. Any of these statements could be inaccurate, and actual events or investments and results of operations could differ materially from those expressed or implied in the forward looking statement. You are cautioned not to place undue reliance on any forward looking statements.
THIS IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES DESCRIBED IN THE DPF PROSPECTUS. THE OFFERING IS MADE ONLY BY THE DPF PROSPECTUS.
Shares will be offered to the public through Dividend Capital Securities LLC., which will act as the managing dealer, and through other members of the Financial Industry Regulatory Authority (FINRA) or with the assistance of registered investment advisors. Securities are not FDIC-insured, nor bank guaranteed, and may lose value.
This material must be read in conjunction with the prospectus in order to understand fully the implications and risks of the offering of securities to which it relates and must not be relied upon to make an investment.
Neither the Securities and Exchange Commission nor any state securities regulator has approved or disapproved of these securities or determined if this prospectus is truthful or complete. In addition, the Attorney General of the State of New York has not passed on or endorsed the merits of this offering. Any representation to the contrary is unlawful. DPF is not an investment company registered under the Investment Company Act of 1940.
Please see the prospectus for a complete list of defined terms and discussion of the risks associated with the offering.