2 Former Non-Traded REITs: One Buy and One Bargain
Upon listing on June 20, Cole became one of the largest publicly traded triple-net sector REITs, with more than $7.7 billion in gross assets. The portfolio consisting of 1,025 properties consists of traditional single-tenant properties as well as a portfolio of shopping centers and other assets.
I followed Cole to the "big board" when the company listed shares at $10.90 (see my previous article here) and since that time Cole has traded up less than 1%. Of course, remember that Cole listed its shares on perhaps the worst day this year -- the day after Ben Bernanke addressed the members of the Federal Reserve's Open Market Committee.
Cole has a current market capitalization of $5.34 million and shares closed Thursday at $10.85. Remember that Cole is unlike a traditional initial public offering in that the shares were previously traded but not listed. Now, however, Cole is trying to gain traction and Cole shareholders can get a clean look at what the shares are worth today.
As I wrote a few weeks back, I like Cole's attractive 6.48% dividend yield. Although the company has little experience in the public markets, the Phoenix-based REIT has demonstrated an earnings history that indicates the company is on stable ground and the prospects look very good for this potential "sleep well at night" REIT. As the institutions begin to warm up to Cole, I suspect the demand will increase.
Bottom Line: Cole is a buy at $10.80 but not a bargain.
Courtesy of SNL.
Speaking of bargain, here's one. Like Cole, Chambers Street Group
Chambers, with a portfolio of 136 properties, is smaller than Cole. It invests exclusively in larger "big box" industrial properties. Chambers has a total capitalization of $3.04 billion and the shares closed Thursday at $8.41 -- over 15% below the listing price of $10.