MacKenzie Realty Capital, Inc. (MKZR) closed a secured loan agreement with Streeterville Capital, a division of Chicago Venture Partners, providing $1,000,000 in cash to purchase approximately $1 million of CNL Healthcare Properties, Inc. (CHP) shares at $4.55 per share. The loan, a promissory note with a principal amount of up to $1,095,000, is backed by a first‑position security interest over assets of MKZR’s subsidiary MRC QRS, a guaranty from MRC QRS, and a pledge of MRC QRS common stock. It also includes an original issue discount, monitoring fees, and multi‑tiered trigger and default provisions that could increase costs if covenants are breached.
The proceeds were used to acquire the CHP shares, which are expected to be paid out at about $6.90 per share once the merger with Sonida Senior Living, approved by CHP shareholders on March 6, is completed. The transaction aligns with MKZR’s stated strategy of investing up to 20% of total assets in illiquid real‑estate securities while keeping the bulk of its portfolio in real property. The company has repeatedly used this approach to generate cash flow and strengthen its balance sheet, but its financial statements show sharp revenue declines, negative profitability, and high leverage, with a market capitalization around $7 million.
CEO Robert Dixon said the deal “is consistent with its long‑standing and profitable strategy of buying non‑traded REIT shares” and that the acquisition “strengthens the Company’s balance sheet and increases its cash flow.” The loan’s covenant structure, however, adds risk, as the note’s covenants and default triggers could lead to higher interest costs if MKZR’s financial performance deteriorates.
The financing follows a series of similar deals, including a $3 million loan secured in June 2025 and a $1.635 million note in January 2026, underscoring MKZR’s reliance on short‑term debt to fund opportunistic purchases in the non‑traded REIT market.
Streeterville Capital, a division of Chicago Venture Partners, is led by John Fife, who has a history of securities law violations. The association with a firm that has faced regulatory scrutiny adds another layer of risk to the transaction.
While the acquisition positions MKZR to benefit from the expected merger payout, the company’s weak financial footing and the high‑covenant nature of the loan suggest that the deal may strain its liquidity if the merger does not close as anticipated or if market conditions worsen.
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