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Regency Affiliates Announces Quarterly Dividend

Third Quarter Dividend Increased to 6.55 Cents Per Common Share

NEW YORK, Sept. 26, 2019 /PRNewswire/ -- Regency Affiliates, Inc. (OTC Pink: RAFI) ("Regency") today announced that it will pay a quarterly dividend of 6.55 cents per common share on October 10, 2019 to shareholders of record at the close of trading on September 30, 2019.

Management Comments

"We are pleased to declare a quarterly dividend of 6.55 cents per common share reflecting a 2.3% increase over the level of quarterly dividend established in September 2018," commented Laurence Levy, Chairman and Chief Executive of Regency. "We continue to be comfortable with this dividend level particularly as we benefit from the cash flows generated by the final distribution received from Mobile Energy of $2.05 million received on July 24, 2019, our ongoing management fee from Security West and our distributions from the portfolio of self-storage assets in and around Harrisburg, Pennsylvania."

"Our Security West investment represents a 50% limited partnership interest in real estate pursuant to a lease with the United States General Services Administration expiring in October 2028. The lease commenced on November 1, 2018 with an initial annual rental payment of approximately $11.75MM per annum. At any time on or after November 1, 2021, the GSA may partially terminate the lease and vacate up to 266,353 square feet by providing 12 months written notice. On or after November 1, 2023, the GSA may terminate the entire lease upon 24 months written notice. A new $30MM mortgage loan was entered into in order to refinance existing indebtedness as well as to finance $17MM of capital improvements and reserves. The balance of the mortgage loan proceeds were distributed to the Security West partners, including a distribution to Regency of over $1.2MM. The new mortgage balance will be amortized down to a balance of $10MM over the first five years of the lease."

"Regency owns five stand-alone self-storage facilities in the Harrisburg, Pennsylvania vicinity acquired for a total purchase price of $35MM of which $25.3MM was financed via a non-recourse ten-year debt financing, with a four-year interest only period ending in May 2020 and thereafter a thirty-year amortization schedule. The facilities were purchased via a joint venture with SSCP Management LLC ("SSCP"). Pursuant to the terms of the joint venture, Regency earns a 7.5% per annum preferred distribution on its $11.2MM capital contribution. Surplus cash flow after the preferred distribution is allocated 80% to Regency and 20% to SSCP. Regency has received its thirteenth distribution from the joint venture in the third quarter of 2019 in the amount of $210,576 reflecting the 7.5% per annum preferred distribution driven by the strong ongoing operating performance of the investment. Surplus cash over and above the 7.5% per annum preferred distribution is retained within the venture. We remain pleased with the continued strong improvement in occupancy and related cash flows at our self-storage facilities."

"In recognition of the decrease in Regency's overall cash flows due to the winding up of Regency's investment in Mobile Energy, Regency has undertaken a full review of all operating expenses. As a result of this review, John Ryan has vacated his post as Regency's CFO and will be pursuing other opportunities. We thank John for his input and dedication to Regency and wish him all the best. The CFO duties have been assumed by Laurence Levy. Compensation to all remaining Regency employees and directors has been reduced by 17.5% effective October 1, 2019. Additionally, Regency's other operating expenses have been reduced wherever possible and Regency will continue to be proactive in minimizing all operating expenses."

"We are continuing to review and evaluate further investment opportunities for Regency and intend to grow the company by acquiring or otherwise investing in other attractive long-term businesses that meet our investment characteristics and valuation criteria."

In order to facilitate efficient processing of the dividend, management strongly suggests all shareholders with shares held in certificate form contact our transfer agent, Transfer Online, Inc. at (503) 227-2950 and confirm that the registration information is correct.

About Regency Affiliates

Regency Affiliates, Inc. invests in businesses that generate attractive, predictable and sustainable returns on capital. We are currently invested in two assets:         

  1. A 50% limited partnership interest in the Security West Complex located on 34.3 acres in Woodlawn, Maryland. The facility is occupied under a lease expiring in October 2028 with the United States General Services Administration, subject to a partial termination right starting at the end of the third year of the lease and a whole termination right starting at the end of the fifth year of the lease; and
  2. A majority joint-venture interest in a portfolio of five stand-alone self-storage facilities in the Harrisburg, Pennsylvania vicinity comprising approximately 337,000 square feet of net rentable space in excess of 2,500 climate and non-climate controlled storage units.

Forward-Looking Statements

This press release contains forward-looking statements. Forward-looking statements are statements that are predictive in nature or depend on or refer to future events and can be identified by the words "may," "might," "will," "should," "anticipate," "believe," "expect," "intend," "estimate," "hope," or similar expressions. Forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy or are otherwise beyond our control and some of which might not even be anticipated. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made.  Future events and actual results affecting our strategic plan as well as our financial position, results of operations and cash flows, could differ materially from those described in or contemplated by the forward-looking statements.  Important factors that contribute to such risks include, but are not limited to, a default or catastrophe involving the properties in which we invest, the extent to which we are able to raise additional capital, and competition for additional investment opportunities. We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.  For a more detailed description of these uncertainties and other factors, please see our website at www.regencyaffiliates.com.



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