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Another nontraded REIT goes public

Oct 1, 2012 @ 1:55 pm

By Bruce Kelly

REITs, mergers
+ Zoom

A nontraded real estate investment trust has seen a successful merger and is now trading on the NYSE.

On Friday, Corporate Property Associates 15 Inc. closed a merger with its parent, the publicly traded real estate manager W.P. Carey & Co LLC. The new company, which is now a publicly traded REIT called W.P. Carey Inc., began trading Monday morning and will retain the symbol WPC.

At 12:30 p.m., the REIT was trading at $48 per share, which was $1 per share lower than its close on Friday.

Some large REITs recently have drawn the scrutiny of investment advisers and securities regulators for lower revaluations and for how the REITs pay distributions, or dividends, to investors.

But other nontraded REITs, including Corporate Property Associates 15, have been looking at the execution of mergers, IPOs and other such “liquidity events,” as they are commonly known in the industry.

In September, Realty Income Corp., a traded REIT, said it would acquire American Realty Capital Trust Inc., which had been a nontraded REIT until its IPO this year. The deal was for $3 billion.

In August, Cole Credit Property Trust II, one of the largest nontraded real estate investment trusts in the industry, said it had engaged two major investment banks as it pursues a “successful exit event” for the REIT. That means management at the property trust is exploring a potential sale of assets or an initial public offering.

Prior to the merger with one of its nontraded REIT affiliates, W.P. Carey had been a real estate manager focused on net lease assets. The new REIT has about $12.7 billion of assets in its portfolio. As a result of its change to a REIT, W.P. Carey is now eligible for inclusion in the FTSE Nareit All-REIT index, the company said in a statement.

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