Friday, April 3, 2009

Another REIT Selling Into The Rally: Kimco Announces Pricing Of Stock Offering

If there is one group of companies that has to be ecstatic about the current sucker rally, it has got to be the REITs. First Simon Property Group sold a boatload of stock to naive investors, now Kimco Realty takes center stage with a $623 million follow on offering of 91.5 million shares at $7.1, a 5% discount from yesterday's closing price of $7.49. On March 19, Zero Hedge discussed the upcoming equity dilutions in the REIT space, but it is good to see that stockholders do not care about 25% dilution events like the one by Kimco and just gobble up these stocks.

Shareholders will be happy to know they are getting diluted (and will get much more diluted in the future) in order for the company to pay down debt, as it is unable to find comparable terms to roll existing debt into: why not just take the most expensive option? Kimco owns and operates one of North America’s largest portfolios of neighborhood and community shopping centers. As of December 31, 2008, the company owned interests in 1,950 properties comprising 182 million square feet of leasable space across 45 states, Puerto Rico, Canada, Mexico and South America.
Some serious cash flow generating assets there.
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3 comments:

Anonymous said...

stock hasnt really participated in the rally. still down over 50% for the yr. mkt must be expecting worse if stock is up 10% on this news?

when is all this bad sht finally priced in?

qadi said...

Epic rally in CRE today.

5U said...

You forgot to mention that ML and DB were underwriters on the stock deal.

ML and DB are long to the gills in CRE

ML upgraded KIM to a BUY concurrent with the equity offering.

This reminds me of the Jack Grubman dayz but with the banks long the krap Grubman was pitching!!!