Nontraded REIT will list on NYSE

Another nontraded, triple-net-lease real estate investment trust intends to list on a stock exchange, making 2013 an impressive year for such investments. 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 was launched in 2006 and was formerly the CB Richard Ellis Realty Trust, has equity of a little less than $2.5 billion. The listing announcement comes after two other triple-net-lease REITs, Cole Credit Property Trust II and Cole Credit Property Trust III, said this year they also were 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. With interest rates near zero, 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.

Markets 'very strong'

“The markets are very strong right now, and receiving these types of offerings pretty favorably,” said Jack Cuneo, chief executive of Chambers Street Properties, adding that 80% of the REIT's assets are in triple-net-lease properties, with the goal being 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 a share. At the end of last year, the REIT was given an estimated value of $10 a share. 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, which has $7.4 billion in assets, in June intends to list on the NYSE.