Wednesday, May 01, 2013

Chambers Street Properties Prepares Listing

Chambers Street Properties, formerly named CB Richard Ellis Realty Trust, announced on Monday that it plans to list its shares on the NYSE on or about May 21, 2013.  As part of the listing process, the REIT disclosed in late March plans to terminate its share redemption and dividend reinvestment program.  The REIT plans a Dutch Auction style tender offer to support the stock once it is listed.  The REIT will acquire up to $125 million of its shares at prices between $10.10 and $10.60 per share (which in reality means $10.10 per share).

As part of the listing, the REIT is dropping its distribution from $.15 per quarter to $.125 per quarter, so for an original $10.00 per share investment, this equates to a yield decrease from 6.0% to 5.0%.  According to filings, the Chambers Street Properties has 129 properties, which are mostly triple net leased and mostly in the United States (although this REIT originally positioned itself as a global REIT).   Chambers Street Properties internalized its advisor last year with without an internalization fee.

Chambers Street Properties started raising equity in July 2004, and continued to raised capital until early 2012,  just an epic offering period.  It therefore acquired its assets before and after the credit crisis, and the target price of more then $10.00 per share (based on the Dutch Auction) is a good indication to me of the strength of the rebound in commercial real estate, and the market's favorable attitude towards net leased real estate.

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