Nontraded REIT will list on NYSE

Chambers Street Properties is latest to seek liquidity event

Apr 30, 2013 @ 3:36 pm

By Bruce Kelly

NYSE
+ Zoom
((Photo: Bloomberg News))

Another nontraded, triple-net-lease REIT intends to list on a stock exchange, making 2013 another impressive year for such real estate investment trusts.

Chambers Street Properties, with $3.2 billion in assets, intends to list on the New York Stock Exchange on or about May 21. The REIT, which launched in 2006 and was formerly the CB Richard Ellis Realty Trust, has equity of a little under $2.5 billion.

Chambers Street's announcement of a listing comes after two other triple net lease REITs, Cole Credit Property Trust II and Cole Credit Property Trust III, said earlier this year they were also working on “liquidity events.” In the nontraded REIT industry, that phrase means giving investors the ability to cash out their formerly illiquid shares through a merger, acquisition or listing.

Triple-net-lease REITs, in which high-quality tenants and not the REIT sponsors are responsible for maintenance, insurance and tax costs for the properties, have been a favorite of investors and financial advisers seeking income in a near zero interest rate environment.

“The markets are very strong right now and receiving these types of offerings pretty favorably,” said Jack Cuneo, chief executive of Chambers Street Properties. He said that 80% of the REIT's assets were in triple net least properties, with the goal to continue buying corporate net lease assets. “We're pretty excited about the market and our position in it and where we're going,” he said.

The REIT also intends to launch a modified “Dutch auction” tender offer to buy up to $125 million of its shares, within a range of $10.10 to $10.60 per share. At the end of last year, the REIT was given an estimated value of $10 per share. Last year, the REIT internalized its management team without paying a separate internalization fee, the company said in a statement.

The move by Chambers Street Properties comes on the heels of announcements in January by Cole II and in March by Cole III that they were also moving toward liquidity events. Cole II expects to complete a merger with the listed REIT Spirit Realty Capital by the end of September. Those two REITs would have a combined $7.1 billion in real estate assets.

Meanwhile, Cole III, with $7.4 billion in assets, intends in June to list on the NYSE.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video

Events

What is your bold prediction for the future of financial services?

What do you think is next for your business and the industry? We asked advisers to tell us where they were heading in the next five to 10 years. One adviser even expects a Super Bowl ad to raise awareness.

Latest news & opinion

Odds are, the $700M Powerball winner will need lots of advice

A good financial adviser — or, better yet, a team of them — would provide a sense of perspective and calm that would hopefully prevent this winner from following in the footsteps of so many past winners who wound up broke just a few years.

Emerging issues affecting financial advice

The profession will need to adjust to enormous shifts in the socioeconomic environment in the coming decade.

Cetera broker-dealers to pay back $3.3 million to clients overcharged for mutual funds

Over an eight-year period, the B-Ds failed to properly supervise sales charge waivers to clients in retirement plans and charitable organizations.

Fiduciary advocates press CFP Board for specifics on standards changes

Meanwhile, few brokerages and their trade associations, which blasted the DOL's fiduciary rule in comment letters, are responding to the CFP Board's proposal.

Big gains attract new money to emerging markets, but should investors stay?

An estimated $6.7 billion has flowed into emerging-market stock funds and ETFs so far this year, according to Morningstar.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print