Unique Self-Management Structure
As a public, non-traded REIT, we believe we are somewhat unique in our transition to a self-management structure, which offers our investors the opportunity for immediate creation of stockholder value through a substantially lower cost structure, including eliminated costs associated with
- Asset Management fees
- Acquisition fees
- Disposition fees
Our property management fees have been significantly reduced as we have brought in independent, nationally recognized 3rd party management service providers.
Healthcare Trust of America, Inc. Comparison of Fees
Self Managed vs. Previous Advisor
| ADVISOR (before) |
SELF MANAGEMENT (current) |
|
| ORGANIZATION | ||
| Management Conflict of Interest | Yes | None |
| Director Conflict of Interest | Yes | None |
| Transaction Based Fees, excluding promote | Yes | None |
| Performance Based Compensation | No | Yes |
| Acquisition Conflict of Interest | Yes | None |
| Dealer Manager Independence | No | Yes |
| Promote Structure | 15% 1 | 9.5% 2 |
| 3rd Party Property Management | No | Yes |
| In-House Expertise | No | Yes |
| Performance & Decision Making Efficiencies | No | Yes |
| Advisor Financial Risk | Yes | No |
| FINANCIAL IMPACTS | ||
| Annuals 3 | ||
| – Asset Management Fee 4 | 100 bpts, 50 bpts | None |
| – Property Management Fee 5 | 4-5% | Market (1.75%) |
One-time fees 3 |
||
| – Acquisition Fee 6 | 3%, 2.50% | None |
| – Disposition Fee 7 | 1.75% | None |
| – Internalization Fee 8 | Likely | None |
1 Upon a liquidity event, such as a sale of assets acquired with proceeds of our initial offering, or listing of our shares on a national securities exchange, our former advisor may be entitled to receive a subordinated distribution, subject to a number of conditions, after stockholders receive an 8% cumulative, non-compounded return.
2 Upon a liquidity event, such as a sale of assets acquired with proceeds of our proposed follow-on offering, or listing of our shares on a national securities exchange, certain members of management and the board of directors and American Realty Capital II, LLC, are entitled to receive subordinated distributions after stockholders receive an 8% cumulative, noncompounded return.
3 We have incurred additional general and administrative costs under self-management as a result of having our own employees and infrastructure; however, we expect the total cost of selfmanagement to be substantially less than the cost of being externally advised.
4 100 basis points on average invested assets from inception through October 24, 2008; 50 basis points on average invested assets after October 24, 2008.
5 Gross Revenue
6 3% on purchase price from inception through October 24, 2008; 2.5% after October 24, 2008 through expiration of the advisory agreement, based on contract price of properties acquired.
7 Sales Price
8 In the event we decided to list our shares on a national securities exchange while externally advised, we likely would have paid our advisor a fee or other compensation to acquire in assets and personnel.
THIS IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES DESCRIBED HEREIN. THE OFFERING IS MADE ONLY BY THE PROSPECTUS. THIS MATERIAL MUST BE READ IN CONJUNCTION WITH THE PROSPECTUS IN ORDER TO UNDERSTAND FULLY ALL OF THE IMPLICATIONS AND RISKS OF THE OFFERING OF SECURITIES TO WHICH IT RELATES. A COPY OF THE PROSPECTUS MUST BE MADE AVAILABLE TO YOU IN CONNECTION WITH THIS OFFERING. Read the prospectus carefully before you make an investment decision. An investment in Healthcare Trust of America, Inc. involves a high degree of risk and there is no assurance that the investment objectives of this program will be attained. The merits of this offering have not been endorsed by any securities regulatory agency. Any representation to the contrary is unlawful. Consult the prospectus for suitability standards in your state.
Realty Capital Securities, LLC (member FINRA/SIPC) is the dealer manager for the Healthcare Trust of America, Inc. offering.
