Thursday, March 19, 2009

REIT Equity Dilutions Coming: SPG Selling 15 Million Shares

Zero Hedge has long been lukewarm on the equity prospects for REITs at current stock prices. Luckily, Simon Property Group just confirmed out pessimism. SPG announced it is raising a total of $1 billion in new stock and debt. The company will try to issue 15 million shares of common stock as well as $500 million of senior notes due 2019. Double whammy of increased dilution and leverage. This should really excite SPG's investors who are already pocketing a mere 10% of their dividends in cash. And who would be the underwriter if not the one and only Goldman Sachs.

If this isn't indictive of the liquidity problems at the REITs (of which SPG has the highest market cap by far), then nothing is. Fortunately for SPG it has a market rally to sell its dubiously valued shares into.

disclosure: long SRS Sphere: Related Content
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Anonymous said...

"Zero Hedge has long been lukewarm on the equity prospects for REITs at current stock prices."

But we're in a Bull market, up 20%! Yea! Confirmed!

Did you know that it's time for you to buy a second, third, forth, or fifth home? Why speculate with stocks when you will be guaranteed a 300% return in 2 years if you buy a home now!

How, You ask?

Simple, think replacement costs.

Land prices are going to boom because the real estate market is about to take off like a rocket. Free money is being floated by the FED! And the real cost of building a home is going to shoot throught the roof because commodity prices are headed north. WAY NORTH! As of today. Don't believe me check out crude oil or unleaded gasoline!

Commodity prices will lift labor costs so when it's time to buy a home they will cost 4 - 5 times what they cost now. So buy a home that is on the market TODAY!! Don't wait! Get out and get going! You'll miss the greatest bull market in the history of the world!

Like Cramer says: "Buy, Buy, Buy". There is always a bull market somewhere and today it's in real estate!

ttyl, no-LOL, BRB, no-BS!

Anyone got a job for a pitchman?