REIT Watch: Rising Rates No Threat to Hudson’s Bay REIT Plan, CEO Says

on Aug 14, 2013


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**REIT Plan Not Threatened by Rising Rates, Hudson’s Bay CEO Says** Wednesday, August 14th: Richard Baker, chief executive of Hudson’s Bay Co., yesterday said that rising interest rates posed no threat to a potential spinoff of the retailer’s real estate assets into a REIT, because the assets hold so much value.
Hudson’s Bay, Canada’s oldest department store chain, agreed in July to acquire American luxury chain Saks for $2.9 billion (₤1.87 billion) and said it would consider launching a real estate investment trust ( Possible REIT Play Behind Hudson’s Bay Acquisition of Saks). “We believe the quality of our real estate is very strong and would be successful in any interest-rate environment,” Bloomberg quoted Baker as saying in an interview yesterday.

Following the acquisition of Saks, Hudson’s Bay’s portfolio would include 32 million sq. ft. of retail space with the acquired Saks properties valued at around $3.5 billion to $4 billion (₤2.26-₤2.58 billion). The Canadian retailer is expected to report second-quarter adjusted earnings of C$0.13 per share, according to a survey of analysts conducted by Bloomberg.

**United States**
**Steadfast Income REIT Buys $80 Million Apartment Community**
Steadfast Income, a California-based real estate investment trust, has acquired a luxury apartment community in Steiner Ranch for $80 million (₤51.7 million). The estate is located in Austin, Texas and has 825,000 sq. ft. of gross leasable area. The 502-unit community consists of four-, three-, two- and one-bedroom units and is 93 percent occupied.

“The Steiner Ranch property presented us with an opportunity to acquire a premier asset in what we believe to be an exceptional growth market,” said Kyle Winning, chief investment officer of Steadfast Companies. “We see significant upside potential in upgrading the unit interiors and will immediately launch a $4 million capital enhancement project that will also address exterior deferred maintenance.”

**Independence Realty Trust Carries Out $34 Million IPO**
Independence Realty Trust, an apartment real estate investment trust with eight properties in its portfolio, raised $34 million (₤22 million) from its initial public offering this week. The REIT offered four million shares priced at $8.50 apiece, below the previously announced range of $10 to $11 per share.
Independence Realty Trust now commands a market capitalisation of $82 million (₤53 million) and intends to list on the NYSE under the symbol IRT. Ladenburg Thalmann & Co, William Blair, JMP Securities and Compass Point acted as joint bookrunners on the IPO.
**Carter Validus Mission Critical REIT Expands Credit Facility**
Carter Validus Mission Critical, a Tampa-based real estate investment trust focusing on properties in the data centre and health care sectors, has expanded its credit facility, which now totals $225 million (₤145 million).
The facility was increased from $110 million (₤71 million) by employing four new banks and through additional commitments from existing lending groups.
**Hudson’s Bay’s share price was C$17.34 as of 14.08.2013, 14.39 BST.**


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