American Realty Capital Trust Inc.’s board of directors and chairman believe that the timing is right for more REITs to enter the publicly traded market.
That’s exactly what the non-publicly traded REIT is doing this week, with plans to offer up to 6.6 million shares of common stock at an assumed price of $11.50 per share in an initial public offering as the REIT’s operating partnership looks to repay indebtedness and raise general working capital.
American Realty Capital Trust, which owns single-tenant, free-standing retail, distribution warehouse and office properties primarily leased to investment grade-rated credit tenants, is scheduled to make its debut on the Nasdaq Global Select Market on Thursday, March 1, almost four years to the day after the company launched. It will trade under the symbol ARCT.
At the same time, it will conduct a secondary offering to raise an additional $50 million to $100 million, and make a tender offer to outstanding shareholders.
"It’s the perfect time to buy real estate and the markets are good right now, with a low interest rate environment, strengthening capital markets and strengthening economic conditions," noted ARCT Chairman Nicholas S. Schorsch. "Capitalization rates are stabilizing and there’s a lot of volatility in the market, so the net-lease space is viable and strong, because the general market is looking for yield."
Schorsch told CoStar the most unique thing about his company is that it’s a net lease REIT focused on investment-grade tenants, with the durability of portfolio and the income stream that it brings.
Indeed, many of the new players are attempting to exploit market niches through the REIT structure.
By Randyl Drummer
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