Realty Income Corp. (O) recently announced that it has priced a public offering of 6.3 million shares at $34.00 per share. The public offering is expected to generate net proceeds of $203.6 million.
The offering was increased from 6.0 million to 6.3 million shares and is expected to be completed by September 26, 2011. In a bid to cover over-allotments, the company will provide a 30-day option to the underwriters for purchasing an additional 945,000 shares.
Realty Income expects to use the net proceeds from the offering to repay borrowings under its $425 million acquisition credit facility, which helps the company to fund real estate acquisitions.
This public offering will enable the company to attain financial flexibility and seize investment opportunities and acquisitions, which go a long way in enhancing top-line growth. As of June 30, 2011, Realty Income’s cash position stood at $155.7 million.
Realty Income reported second quarter 2011 FFO (funds from operations) of $60.9 million or 48 cents per share compared with $46.8 million or 45 cents per share in the year-earlier quarter. Funds from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
Realty Income primarily engages in the acquisition and ownership of commercial retail real estate properties in the United States. The company leases its retail properties primarily to regional and national retail chain store operators.
As of June 30, 2011, Realty Income’s portfolio of single-tenant properties consisted of 2,523 properties located in 49 states, leased to 131 retail chains and other commercial enterprises doing business in 37 industries.
Realty Income currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, Kimco Realty Corporation (KIM) also holds a Zacks #3 Rank.
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REALTY INCOME (O): Free Stock Analysis Report
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