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Six New REITs Outperform Market

Ten real estate investment trusts (REITs) have gone public this year, and six have outperformed the market, according to ""SNL Financial,"":http://www.snl.com/InteractiveX/Article.aspx?cdid=A-17129708-13352 a New York-based firm that analyzes the financial and real estate markets.


Year-to-date as of October 3, the 10 REITs raised $3.4 billion through their initial public offerings (IPOs), according to SNL, which calculated each REIT's returns since its respective IPO date and compared it to the SNL U.S. REIT Equity Index over the same time period.

Outpacing the index by about 21 percentage points, Chicago-based Aviv REIT claimed the highest return of all the REITs with IPOs this year. Aviv went public with an initial $303.6 million offering on March 20 and earned an 18.27 percent return year-to-date. This compares to the SNL index return of -2.82 percent over the same time period.

Physicians Realty Trust and Gladstone Land Corp. also performed substantially better than the SNL index, outpacing the index by 15.23 percentage points and 14.97 percentage points, respectively.

Physicians Realty went public July 18 offering shares for $11.50 each and has raised $135 million since its IPO date, a 7.91 percent return compared to the index return of -7.31 percent over the same time period.

Gladstone Land Corp., has brought in a 13.49 percent return since its IPO January 28, compared to the market


return of -1.48 percent. The Gladstone REIT has raised $56.7 million year-to-date.

The three other REITs released this year that outperformed the market were Rexford Industrial Realty Inc., American Homes 4 Rent, and Empire State Realty Trust Inc.

Rexford introduced its IPO July 18, raising $230 million at $14 per share. The REIT's returns were 4.81 percentage points higher than the SNL index.

American Homes 4 Rent released its IPO July 31 with one of the largest REIT IPOs to date, according to SNL. The REIT raised about $811.8 million in its initial offering and has gained a -2.5 percent return year-to-date. Despite its negative return, it was the only single-family REIT to perform better than the SNL index since its IPO date.

Empire State Realty Trust Inc., introduced its IPO October 1, raising $919.5 million. The REIT has outperformed the index by 3.12 percentage points through October 3.

Just as SNL released its findings of the year's 10 new publicly traded REITs, QTS Realty Trust, Inc., announced Wednesday it is introducing an IPO of 12.25 million shares at $21 per share for a total return of about $257 million.

The shares will be available on the New York Stock Exchange-with the ticker ""QTS"" Wednesday and an expected close date of October 15.

Book-running managers for QTS include Goldman Sachs & Co., Jefferies LLC, BofA Merrill Lynch, Deutsche Bank Securities Inc., KeyBanc Capital Markets Inc., and Morgan Stanley. J.P. Morgan Securities LLC and Stifel, Nicolaus & Company, Incorporated will serve as co-managers for the QTS IPO.

Four other REIT IPOs have been announced for later this year, including Blackstone spinoff Brixmor Property Group Inc., Ellington Housing Inc., Waypoint Homes Realty Trust Inc., and Colony American Homes Inc., the latter two of which have been prominent players in the REO-to-rental market.


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