# MacKenzie Realty Capital, Inc.

> Clarifo company profile — qualitative business description generated from
> the company's filings. Financial statements, charts and ratios are
> available on Clarifo (https://www.clarifo.com/en/companies/MacKenzie Realty Capital, Inc.).

## Overview

MacKenzie Realty Capital, Inc. is a U.S.-based REIT that invests primarily in real estate assets and, to a lesser extent, in securities of real estate-related companies. The portfolio is managed by affiliated advisers and is built around opportunistic, value-add, and invest-to-own transactions, with income coming from rents, investment income, and related fees.

## Products & services

• Direct investments in commercial and multifamily real estate
• Value-add property acquisitions and repositioning
• Opportunistic/distressed real estate investments
• Invest-to-own development structures
• Real estate securities and non-traded REIT shares
• Rental, reimbursement and other property income

- **Owned real estate assets** (55%) — Office, retail, apartment and other income-producing properties held for rent and appreciation.
- **Real estate securities** (20%) — Equity and debt securities of U.S. real estate companies, including non-traded REITs.
- **Rental and property income** (20%) — Lease revenue, reimbursements and other income generated from tenant occupancy.
- **Fees and investment income** (5%) — Interest, dividends and transaction-related fees from investments and securities.

- Direct investments in commercial and multifamily real estate
- Value-add property acquisitions and repositioning
- Opportunistic/distressed real estate investments
- Invest-to-own development structures
- Real estate securities and non-traded REIT shares
- Rental, reimbursement and other property income

## Customers

The company does not sell to end consumers in the usual sense; its economic counterparties are tenants, real estate sponsors, and issuers of real estate-related securities. Tenant demand comes from small and mid-sized businesses leasing office and retail space, while capital is deployed into properties and securities that management believes are mispriced or undercapitalized.

- **Commercial tenants** (primary) — Businesses leasing office and retail space, such as wine wholesalers, restaurants and local service firms, to generate recurring rent.
- **Multifamily tenants** (primary) — Residents leasing apartment units in the multifamily portfolio, supporting stable occupancy and rental cash flow.
- **Real estate sponsors and operators** (secondary) — Owners and developers that receive capital through direct property acquisitions, mezzanine loans or convertible preferred structures.
- **Real estate securities issuers** (secondary) — Non-traded REITs, small-cap REITs and other real estate entities whose securities are purchased at discounts to NAV.

- Office and retail tenants seeking smaller, well-located spaces
- Apartment tenants in multifamily properties
- Real estate sponsors/operators needing acquisition or growth capital
- Non-traded REITs and real estate companies selling securities
- Investors seeking current income and capital appreciation

## Geography

The business is overwhelmingly U.S.-focused, with properties and securities tied to domestic real estate markets. The filings specifically mention California and New York-related structures, and the company’s exposure is driven more by local property fundamentals than by international diversification.

- U.S.-centric portfolio and securities exposure
- California operating footprint through subsidiary and property assets
- New York-related investment activity through MacKenzie NY 2
- Local market occupancy and rent trends drive cash flow
- No meaningful non-U.S. operating footprint disclosed

## Strategy

MacKenzie is focused on buying real estate and real estate-related securities at discounts to estimated value, then creating upside through repositioning, development or capital structure solutions. Management also uses niche securities strategies, including tender offers for non-traded REIT shares, to support cash flow and distributions.

- **Acquire discounted real estate assets** (short-term) — Buying below value is the core source of upside and income generation.
- **Reposition and improve existing properties** (medium-term) — Renovation, redevelopment and lease-up can lift rents and asset value.
- **Use real estate securities to enhance cash flow** (medium-term) — Securities purchases and tender offers can supplement distributions and liquidity.

- Buy assets below estimated intrinsic or NAV-based value
- Pursue value-add renovations and redevelopment
- Target opportunistic and distressed situations
- Use invest-to-own structures in development projects
- Keep real estate securities below 20% of total assets

## Risks

The company is exposed to property-level vacancy, lease rollover and valuation risk because its cash flow depends on occupancy and market rents. It also faces execution and governance risk from external management, plus securities-law and cyber risks highlighted in the filings.

- **Office market weakness and vacancy** [high] — A large part of the portfolio is tied to office properties, which the company says the market discounts because of widespread vacancies.
- **Property valuation and refinancing risk** [high] — Returns depend on buying below value and later realizing appreciation; higher rates or weaker cap rates can reduce NAV and financing flexibility.
- **External management and advisory fees** [medium] — The company is externally managed by affiliates, so fees and related-party arrangements affect costs and incentives.
- **Rescission claims from dividend reinvestment program sales** [high] — The company disclosed a possible securities-law defect in prior DRIP issuances that could lead to repurchase obligations.
- **Cybersecurity and data exposure** [medium] — Tenant, adviser and internal systems are increasingly technology-dependent, raising operational and privacy risk.

- Office vacancy and weak demand can pressure occupancy and rents
- Property values may fall if cap rates rise or markets reprice assets
- External management creates fee, alignment and execution risk
- Securities-law rescission claims could create repurchase liabilities
- Cyber incidents could disrupt operations or expose tenant data

## Accounting

Revenue is driven mainly by lease accounting, with rental income recognized on a straight-line basis over lease terms under ASC 842. Because the company also holds real estate securities and other investments, fair value changes, unrealized gains/losses and NAV estimates can materially affect reported results and investor perception.

- **Straight-line rental revenue recognition** — Can create differences between cash collections and reported rental income
- **Lease incentives and tenant improvements** — Affects rental revenue, deferred rent receivable and property economics
- **Fair value measurement of investments** — Can materially affect unrealized gains/losses and NAV
- **Use of estimates and valuation judgments** — Can change reported asset values and earnings volatility

- Rental revenue is recognized straight-line over lease terms
- Tenant improvements and lease incentives affect deferred rent
- Real estate securities are exposed to fair value marks
- Unrealized gains and losses can swing period results
- NAV estimates are important for valuation and distributions

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*Last updated: 2026-04-28T20:25:57.953880+00:00*