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REIT Replay: Fair game


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REIT Replay: Fair game

REITs inched up Tuesday, April 26, as MGM Resorts completed theformation of its publicly traded REIT, which raised roughly $1.1 billion in proceedsfrom an IPO.

The MSCI US REIT Index (RMZ) gained 0.38% to 1,145.06, and theSNL US REIT Equity Index added 0.43% to finish at 305.82. The Dow Jones IndustrialAverage inched up 0.07% to close at 17,990.32, while the S&P 500 rose 0.19%to end the day at 2,091.70.

MGM Resorts Internationalannounced that the formation of MGMGrowth Properties as a publicly traded REIT is final and the newly minted REIT wrapped up its IPO, generatingroughly $1.1 billion in proceeds.

The REIT offered 57.5 million class A common shares in the at a price to the public of $21.00 apiece. The offering includedthe full exercise of the underwriters' option to buy 7.5 million additional classA shares.

The proceeds from the IPO were used primarily by MGM Growth tobuy operating partnership units in a newly formed operating partnership, which,in turn, used the funds to buy the real estate related to several properties fromMGM Resorts.

Shares of MGM Resorts picked up 0.37% to $21.84 on April 26,and MGM Growth shares added 1.40% to $22.39.

In earnings, SimonProperty Group Inc., UDRInc. and Wyndham WorldwideCorp. each reported respective gains in FFO per share, AFFOper share and EPSduring the first quarter.

In reporting first-quarter gains in FFO, Simon slightly both the low and high endsof its 2016 FFO-per-share guidance and announced a 6.7% higher quarterly commonstock dividend of $1.60 per share. It will pay the dividend May 31 to stockholdersof record May 17.

UDR reaffirmedits full-year estimates and issued second-quarter guidance for FFO per share andFFO as adjusted per share. Wyndham, meanwhile, boosted its adjusted EPS for the full year.

Simon shares inched forward 0.14% to $203.95 on Tuesday, UDRshares fell 0.99% to $36.12 and Wyndham shares plunged 7.47% to $70.39.

Crown Castle InternationalCorp., Ashford HospitalityPrime Inc. and First CapitalRealty Inc. all announced capital offerings.

Crown Castle said it plans an offering of 3.400% senior notes due 2021 and senior notesdue 2026, subject to market and other conditions. The net proceeds will be usedto help repay in full certain of its senior secured tower revenue notes.

Ashford Hospitality Prime initiated an underwritten public offering of 290,850 sharesof series B cumulative convertible preferred stock, with a $25.00-per-share liquidationpreference, on which dividends will accrue at a 5.50% rate.

The "small capital raise" is meant to satisfy a contractualobligation related to the hotel REIT's June 2015 initial private of $65 million of series A cumulativeconvertible preferred stock and allow the company to list the preferred stock onthe NYSE.

First Capital Realty kickedoff a bought-deal offering of C$150 million of 3.604% series T seniorunsecured debentures due 2026, with the goal of using the net proceeds to repayoutstanding amounts under its senior unsecured revolving credit facility and supportgeneral corporate functions.

Crown Castle shares ticked up 0.44% on Tuesday to $87.56, whileAshford Hospitality Prime share jumped 4.51% to $11.13 and First Capital sharesdropped 2.41% to C$19.86.

In property news, PotlatchCorp. revealed in its first-quarter earnings release that it is roughly 172,000 acres ofits timberlands in central Idaho and that a $60 million share repurchase programhas been approved by its board.

The Spokane, Wash.-based timber REIT said Southern Pine Plantationsis acquiring the timberland assets for $114 million. The stock buyback, meanwhile,is anticipated to be completed in the next 24 months.

"The attractive offer for our less productive central Idahotimberlands frees up our capital without having to wait for the real estate marketto rebound. This will allow us to take advantage of our low public market valuationby repurchasing shares, as well as reduce our leverage by retiring debt," Chairmanand CEO Mike Covey said in a release.

Potlatch shares added 3.93% on April 26 to finish at $35.17.

On the macro front, S&P Dow Jones Indices reported that U.S.home prices experienced slow growthin February, with the national home price index recording a 5.3% annual gain, whichis the same as the January level. The 10-city and 20-city composite indexes loggedrespective year-over-year increases of 4.6% and 5.4% in February, compared to theJanuary gains of 5.0% and 5.7%, respectively.

Now featured

Simon talks big-picturestrategy, GICS change: The executive told industry observers on SimonProperty Group's earnings call that the company is not weighing any transformationalmoves and is still effectively out of the big deal business.

David Simon onmall biz crisis: 'We don't see it': On an earnings call, Simon Property'sChairman and CEO once again sought to discredit media reports about the existentialcrisis facing the mall business.

American Campusmeeting with institutional investors on a large portfolio sale, execs say:The company hopes to direct the proceeds of a round of asset sales into new development,executives said in an April 26 earnings conference call.

The Guidance Report:This roundup of recent guidance from real estate companies includes updates fromAmerican Campus Communities and QTS Realty.

The Property Ledger:Liberty Property details Q1 activity; InnSuites nixes $14.8M deal to sell Calif.hotel: The April 26 edition of North American property news roundupalso features asset sales by Consolidated-Tomoka and Condor Hospitality.

Market prices and indexvalues are current as of the time of publication and are subject to change.