Daily market intelligence on mortgages, equity raising, investment sales, and CMBS.

Monday, 18 April 2016

Net-Leased Pro Aims to Raise Capital for REIT Through Mini-IPO

David Sobelman, co-founder of net-leased property specialist Calkain Cos., is aiming to raise $20 million through a mini-IPO for a REIT that would pursue net-leased properties. The REIT would be the first real estate company to take advantage of part of the four-year-old JOBS Act, whose aim was to facilitate raising capital from investors.

Commercial Real Estate Direct Staff Report

David Sobelman, a long-time player in the net-leased real estate business, has launched a REIT. But it's not like any other REIT, traded or not.

His Generation Income Properties Inc. takes advantage of Regulation A+, part of the Jumpstart Our Business Startups, or JOBS, Act that was signed into law in 2012. The rule allows investment offerings to be marketed to non-accredited investors in offerings up to $50 million. It also streamlines the registration process by, for instance, not having to register a securities offering in every state that it's offered.

Generation Income initially aims to raise $20 million through its so-called mini-IPO by selling shares for $5 each through a best-efforts offering, meaning Sobelman will be making his best effort to place shares with investors. In a traditional underwritten stock offering, an investment bank is used as an intermediary and commits to sell a specific number of shares to investors. Shares in the REIT will be traded over the counter.

"My intent is to be traded on an exchange from the beginning," Sobelman said. "It's really important. I want transparency and liquidity." He said he was taking advantage of Reg A+ because of the streamlined registration process, which eliminates a number of costs.

"I'm trying to be frugal," he said, noting that the legal expenses in filing a more traditional registration would have amounted to more than $1.5 million. By eliminating such costs, "I can pass on a lot of savings to early investors. This is a startup. You shouldn't be spending a lot of money when you're starting...





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Data Digest

 

CMBS DELINQUENCY VOLUME

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CMBS SPECIAL SERVICING VOLUME

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Top Bookrunners Domestic, Private-Label CMBS - 2016
Investment Bank #Deals Vol$mln MktShr%
JPMorgan Securities 14.94 10,350.16 15.14
Deutsche Bank 14.21 9,926.60 14.52
Wells Fargo Securities 13.36 9,513.96 13.92
Citigroup 10.87 8,061.79 11.80
Goldman Sachs 10.05 7,563.72 11.07

 

MOODY'S/RCA CPPI

 

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CMBS 2.0 Spreads

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Top CMBS Loan Contributors - 2016
Lender #Loans Vol$mln MktShr%
JPMorgan Chase Bank 133.67 8,670.33 13.34
Goldman Sachs 156.20 7,418.37 11.41
Deutsche Bank 178.17 6,510.75 10.02
Citigroup 184.41 5,512.20 8.48
Morgan Stanley 113.18 4,130.53 6.35

 

 

 

REITCafe

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  • US REITs Feeling Effects from Turmoil in Greece and China
    International economic forces have taken center stage this week, affecting both US stock markets and REITs. The crash in the Chinese stock market and ongoing concerns about the future of Greece in the eurozone drove markets down during the first half of the week. REITs fared better than the overall market...

  • What Does Increased Construction Mean for Apartment REITs?
    REITs so far this year have raised $17.1 billion of capital through the sale of unsecured notes, bringing the total raised over the past two and a half years to just more than $75 billion. That’s more than they raised during the previous five years. The massive volume shouldn’t be a surprise as it comes while the yield from 10-year Treasury bonds, the benchmark...
shouldn’t be a surprise as it comes while the yield from 10-year Treasury bonds, the benchmark against which most REIT’s price their bonds
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