June 5 Update – payouts and quarterly share value updates went out this morning.
Per the Investor Relations team, dividends are delayed due to a technical glitch and should be forthcoming within a few business days.
What Happened & Why?
Here provides quarterly payouts from the rental income of their offerings. In the first round of payments that occurred in February, they also updated share prices and sent communication about the performance of their vacation rentals.
For Q1, investors were expecting to receive payouts and similar updates in May. This expectation was set by the company as well, being reflected directly on their Portfolio page. It is now June 1 and neither have happened.
In an email from their Investor Relations team, we heard the following about the situation:
My name is [redacted], and I’m on the Investor Relations team at Here – thanks for reaching out and thanks for your patience here.
We experienced a bit of an operational delay due to a technical glitch on our side. May 2023 dividends will be processed and delivered to investors within the next few business days.– Here’s Investor Relations Team
Our Thoughts On Why This IS An Issue
First, let’s start by acknowledging that Here is a relatively small and new company. They have also paid out dividends only one time so far – in February. It is somewhat understandable that their tools and processes may be imperfect and small hiccups could be expected.
In the time since the first payouts, the banking landscape has changed quite a bit with the collapse of SVB and others. We don’t know if Here was affected at all, but this could have caused some operational changes with Here itself or one of their partners involved in the processing of payments. When things change, there’s always room for error.
Even if we “cut them some slack” for the technical error, it seems reasonable to expect better execution and communication from Here.
First, their main competitors are already doing better. Arrived delivered payments in April and other platforms like Ark7 and Lofty have consistently provided payments even more frequently than that. A quarterly payment in May is already relatively late.
Second, Q4 payments in February were delivered on the 21st. That’s a full week before the end of the month. This calls into question when payments were originally targeted for and how long they have been battling this technical issue.
Third, there still has been no communication from the company about the issue. By 5-8 PM Eastern time on May 31, it would have been clear that payments were not going to make it out to investors on time. It seems reasonable to expect at least a short message notifying investors of the delay.
We also know that multiple inquiries about the delay have been sent to the company. We received our response from Investor Relations over two hours ago. Even knowing that the delay has been noticed and is causing confusion among their investors, they still have not sent out any formal communications across any channel that we monitor.
Lastly, even if the delivery of dividends were delayed, it seems like the company should have been able to provide the same quarterly updates from February. That would include things like updating the share prices, any performance highlights, and declaring what the dividend payments would be when they arrive a few days later.
Overall the lack of any communication seems a bit weird. This is purely subjective, but it feels like they were hoping that no one would really notice or care if they were a few days late and they could avoid calling extra attention to the delay.
June 5 Update: Payments Arrive
This morning payouts went through and are now available for withdrawal from your Here wallet. Share values have also been updated as well.
However, we did have two properties that were originally scheduled to receive payouts in May that didn’t generate any dividends. They now show August ’23 as the next payout date.
This may not be an error. While Here cites a total quarterly performance of 14%, 13.56% of that was appreciation. According to the company, their properties only generated 0.39% in rental income. With such a small number overall, it’s possible some properties generated no surplus income to payout.
Additionally, the average occupancy rate was 53% with an average daily rate of $228. This is in-line with Arrived’s 54% occupancy rate provided by the company in their Q1 financial performance email update.
Q1 payments were late due to a technical issue, but arrived within a few business days of the original deadline.
While it may be reasonable to excuse a small one-time delay in the processing of payments, we also feel it is reasonable to expect better communication from the company. Going forward, we hope future payments and quarterly updates will be smoother and that the Here team will be more communicative about any issues that arise.