Brixmor heats up US market
THE debut of Brixmor Property Group on the US stock market is adding fuel to what is already the biggest year for American real estate initial public offerings in almost a decade.
The second biggest shopping-centre landlord, owned by Blackstone Group, is set to raise as much as $905.6m (€656m) including extra shares for underwriters, potentially surpassing Simon Property Group as the largest-ever IPO of a retail real estate investment trust. Brixmor is offering 37.5 million shares for $19 to $21 each, with an extra 5.6 million for the over-allotment.
Blackstone is taking its first REIT public in what is poised to be a wave of property IPOs by the world's largest alternative-asset manager, from hotel chain Hilton Worldwide to potential sales next year of its IndCor Properties and Invitation Homes businesses.
The US economic recovery, falling commercial real estate vacancies and low interest rates have primed the pump for public offerings, with REIT stocks at close to six-year highs.
"It's a great time to sell," said Anthony Breault, senior real estate investment officer for the state of Oregon's pension fund, which is seeing the most distributions from its private-equity real estate managers this year since the commercial-property boom that ended in 2007.
"Leasing is back up and there's a froth of demand for income-producing assets."
Property-related IPOs, including REITs, real estate operating companies and mortgage trusts, have had their biggest year since 2004 by money raised. So far in 2013, real estate IPOs have raised $3.9bn, compared with $3bn in all of 2012.
A Brixmor sale at the top end of the range would exceed the $811.8m raised by Malibu, California-based house-rental company American Homes 4 Rent in July, including over-allotments.
It would follow only the $1.07bn offering of Empire State Realty Trust, the New York-based owner of Manhattan's Empire State Building, for deals this year. Indianapolis-based Simon, the world's largest owner of shopping malls, raised $840m in its 1993 IPO.
Nine of the 14 real estate IPOs this year have gained since their initial offering price, led by a 29pc jump in Re/Max Holdings Inc, a Denver-based residential property broker. The biggest loser is Ellington Residential Mortgage REIT of Old Greenwich, Connecticut, which has dropped 18pc from its May 1 debut. (Bloomberg)