CapLease, Inc. (NYSE: LSE) is out raising what oon the surface appears to be expensive capital. The commercial real estate investment trust has priced an underwritten public offering of 2,000,000 shares of 8.375% Series B Cumulative Redeemable Preferred Stock. The public offering price is the typical $25.00 per share that you see on preferred offerings so frequently, but that rate just feels and looks higher than what many offerings have gone out at considering the current environment when you consider that these preferred offerings generally have a higher ranking in the capital structure than the common shares.
CapLease intends to file an application to list the Series B preferred shares so that they trade independently from the common shares. As far as how the $50 million compares to the overall size of CapLease, the trust’s market value of its common stock is listed as only $276 million according to the data on Yahoo! Finance.
This REIT generally finances and invests in commercial real estate that is net leased primarily to single tenants with investment grade or near investment grade credit ratings. The trust noted that it intends to use the net proceeds (approximately $48.3 million with consideration of an overallotment) to fund future acquisitions and for other general corporate purposes.
Wells Fargo Securities and Citigroup Global Markets were the joint book-runners; co-managers were Stifel Nicolaus & Company and Keefe Bruyette & Woods.
JON C. OGG