In his letter, Conforti, whose group has an investment pool of more than $150 million, notes that AMV's stock is hovering around $3.50 per share, which is no higher than it was in 1997, and well below the $7.30 reached before the company announced a strategic alternative review in November 2004. In an interview, Conforti says that he thinks the break-up value of the company could equal in the mid-to-high $5 range.

"This unfortunate record stands in dismal contrast to the performance of the REIT industry as a whole during these same periods when leading indices have risen dramatically," Conforti writes in the letter obtained by GlobeSt.com. He goes on to say that AMV's management and board's decisions to consider "strategic alternatives," are likely to raise the stock price. "In fact, they are merely another step in the painful destruction of our company--yes, it is owned by all of the shareholders--and our investment," he says. "If continued without alteration, it will only prolong the agonizingly slow death process in which you have been engaged for the last year,"

Conforti notes that AMV's business strategy throughout the last several years has been the acquisition and management in a public company format of small-tenant-focused office buildings in Denver, Dallas and Phoenix. "However laudable this strategy may have initially appeared, the board, management and shareholders now must acknowledge that either the strategy itself and/or its execution have failed in terms of both cash flow generation and value creation," Conforti says.The letter goes on to read, "Your program of limited-asset sales with no further growth plan other than hoping our remaining properties will benefit from a general recovery in the office market will leave AmeriVest a shrunken, stunted company with too small an asset base to support the overhead, including the substantial costs of public company reporting and compliance, placed upon it."

Conforti says the private-market value of the company's assets is significantly higher than the current stock price, and that—outside of an outright sale of the company—the formation of a liquidating trust is the only means by which to realize this value. "Accordingly, we are asking that management recommend and the board adopt, subject to shareholder approval, a formal plan of liquidation for AmeriVest Properties Inc. under which all of the company's assets would be sold in an orderly process and the proceeds distributed to shareholders," he says.

Conforti says the time is right for liquidation, especially since the investment market for commercial real estate is so strong. And the buildings owned by AmeriVest, for the most part, have occupancy rates above 90%.

Knight, for his part, says he has yet to read the letter, and therefore cannot comment. Also, he notes that he is limited to what he can say, other than referring to earlier statements from the board. He notes that the board has said in the past it is considering numerous strategic alternatives, which could include liquidation.

Conforti, retorts, saying that Knight is reluctant to liquidate the company. In his letter, he references a recent conversation in which Knight allegedly "considered adopting a plan of liquidation but rejected this alternative for two reasons: It would be "expensive" and, once adopted, would commit you to actually implement it by selling the company's assets," Conforti writes. Conforti says he hopes to meet with Knight in the near future to discuss his proposal.

Instant Insights /

Conforti Calls for Liquidation of AmeriVest Assets

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