SCHEDULE: Medalist REIT CEO Boosts Stake to 25.8% via OP Units

Medalist Diversified REIT's CEO, Francis P. Kavanaugh, increased his beneficial ownership to 25.8% through various OP Unit transactions, including a recent exchange of common stock.

Summary

• Francis P. Kavanaugh, President and CEO of Medalist Diversified REIT, Inc., beneficially owns 388,044 common units of limited partnership interest (OP Units) in Medalist Diversified Holdings, L.P.
• This ownership represents approximately 25.8% of the Issuer's total issued and outstanding Common Stock, calculated based on 1,505,270 shares outstanding as of August 11, 2025.
• The OP Units are redeemable for cash equal to the fair market value of one share of Common Stock, or the Operating Partnership may elect for the Issuer to acquire them for Common Stock on a one-for-one basis.
• On August 8, 2025, Francis P. Kavanaugh exchanged 240,004 shares of Common Stock for an aggregate of 240,004 OP Units, which will become redeemable on August 8, 2026.
• Current redeemable OP Units within 60 days include 19,348 units issued on January 18, 2024 (redeemable January 18, 2025), and 208,696 units issued on March 28, 2024 (redeemable June 17, 2025).
• An additional 160,000 OP Units, issued on October 11, 2024, will become redeemable on October 11, 2025.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive. The CEO's significant and increasing beneficial ownership stake, reaching 25.8%, demonstrates strong insider alignment and confidence in the company. While the exchange of common stock for OP units is a structural change in holdings, the overall commitment remains high. The filing does not contain negative operational or financial news.

Positives

• Increased beneficial ownership by the CEO, Francis P. Kavanaugh, to 25.8% signals strong insider confidence and alignment with shareholder interests.
• The acquisition of OP Units through a private placement for $2,000,000 demonstrates direct capital investment by the CEO into the company.

Risks

• The redeemable nature of OP Units for cash or common stock could lead to potential dilution if the Operating Partnership elects to issue common stock upon redemption, or cash outflow if cash redemption is chosen.

Future Outlook

The filing indicates future dates when various tranches of OP Units held by Francis P. Kavanaugh will become redeemable for Common Stock or cash, with the latest being August 8, 2026, for the 240,004 OP Units acquired in the recent exchange.

Industry Context

This filing primarily details changes in beneficial ownership by a key insider (CEO) within a Real Estate Investment Trust (REIT). While not directly addressing broader industry trends, increased insider ownership can be a positive signal in the REIT sector, indicating management's confidence in the company's real estate portfolio and strategy amidst market conditions.

Related Party Transactions

• Issuance of 19,348 OP Units to Francis P. Kavanaugh (CEO) on January 18, 2024, as compensation for service.
• Issuance of 208,696 OP Units to BET Trust (an entity controlled by Francis P. Kavanaugh) on March 28, 2024, as consideration for a property acquisition.
• Private placement of 160,000 OP Units to Francis P. Kavanaugh on October 11, 2024, for $2,000,000.
• Exchange of 240,004 shares of Common Stock for 240,004 OP Units by Francis P. Kavanaugh on August 8, 2025.

Stakeholder Impact

• Shareholders: Increased insider ownership by the CEO may be viewed as a positive signal of confidence in the company's future performance and alignment of interests.
• Creditors: The private placement of OP Units provided additional capital to the company, potentially strengthening its financial position.

Next Steps

• 160,000 OP Units held by Francis P. Kavanaugh will become redeemable on October 11, 2025.
• 240,004 OP Units acquired by Francis P. Kavanaugh in the August 8, 2025 exchange will become redeemable on August 8, 2026.

Key Dates

Recommendation

The filing indicates a significant and increasing beneficial ownership stake by the CEO, Francis P. Kavanaugh, reaching 25.8% of the company's common stock equivalent through OP Units. This high level of insider alignment can be viewed positively, suggesting confidence in the company's long-term prospects. However, the filing is primarily an ownership disclosure and does not provide new operational or financial performance data to justify a change in investment thesis. The recent exchange of common stock for OP Units by the CEO is a structural change in his holdings, but his overall economic interest remains substantial. Without further operational updates or financial results, a 'hold' recommendation is appropriate, acknowledging the positive signal of insider commitment while awaiting more comprehensive business performance indicators.

Keywords

Medalist Diversified REIT, REIT, Francis P. Kavanaugh, Schedule 13D, Beneficial Ownership, OP Units, Insider Ownership, Private Placement, Real Estate Investment Trust