In an effort to infuse capital, Mass.-based real estate investment trust (REIT) – Winthrop Realty Trust (FUR) – disclosed the pricing of public offering of 2.75 million common shares of beneficial interest at $11.45 per share. Moreover, underwriters have been granted an option for 30 days to acquire up to an additional 412,500 shares of common stock.
This capital infusion would help Winthrop improve its financial flexibility. The company plans to invest the proceeds in financing its future buyouts. This may include the company’s recently disclosed purchase of four newly constructed class A luxury apartment buildings for a total of $246 million.
Moreover, the company may meet its other working capital needs, capex expenses, tenant improvements and leasing commissions with the funds generated through this stock offering.
As a matter of fact, of late, Winthrop is focused on riding on the growth trajectory by capitalizing on opportunistic investments. In august, the company disclosed a number of strategic measures aimed at restructuring its portfolio and improving its fundamentals.
These include buying its joint venture (JV) partner’s 50% interest in the mezzanine loan, indirectly secured by an Ill.-based property for $30 million, a deal to buy a property in Oklahoma City, a sale agreement for a San Antonio property and the disposition of a Seabrook asset.
Though the stock offering would lead to share dilution, we believe that the capital infusion effort would provide it with the much needed financial flexibility that would help in carrying out its repositioning initiatives. Such moves, in turn, would help enhance its portfolio quality and drive bottom-line growth.
Winthrop carries a short-term Zacks Rank #3 (Hold). Other well-performing REITs include Sotherly Hotels Inc. (SOHO), CubeSmart (CUBE) and Douglas Emmett Inc. (DEI). While Sotherly carries a Zacks Rank #1 (Strong Buy), CubeSmart and Douglas Emmett have a Zacks Rank #2 (Buy).
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