HARTFORD, CT-After receiving $300 million in private capital upon its formation last June, CBRE Realty Finance, Inc. is now looking to raise $200 million via an initial public offering of common stock. The locally based commercial real estate specialty finance company formed by CB Richard Ellis Group Inc. and subsidiary LJ Melody & Co. last June, filed with the US Securities and Exchange Commission on Friday.
Ray Wirta, the former chief executive officer and current vice chairman of CB Richard Ellis Inc., is the chairman of CBRE Realty Finance. Keith Gollenberg, a former Cigna Investment Management Capital Markets Group executive, is the company's president and chief executive officer. The net proceeds of a private placement of 20 million shares of common stock to institutional and accredited investors last year raised $300 million for the company.
According to the filing, revenues for the period ended Dec. 31, 2005 were $12.4 million and net income was $1.05 million. The firm intends to elect and qualify to be taxed as a REIT for US federal income tax purposes beginning with its taxable year that ended Dec. 31, 2005.
"Our objective is to grow our portfolio and provide attractive total returns to our investors over time through a combination of dividends and capital appreciation," the company states in its IPO documents. "Our business primarily focuses on originating, acquiring, investing in, financing and managing a diversified portfolio of commercial real estate-related loans, securities and other interests. Our initial investment focus is on opportunities in North America."
According to its SEC filing, the company's financing strategy includes the use of the offering proceeds to finance further commercial real estate acquisitions. Subsequently, the company states it intends to borrow against or leverage its existing portfolio and use "the proceeds to acquire additional investments. Our leverage policy permits us to leverage up to 80% of the total value of our assets. We anticipate our overall leverage will be between 70% and 80% of the total value of our assets; but our actual leverage will depend on our mix of assets."
Credit Suisse Securities and Deutsche Bank Securities are the underwriters of the offering. CBRE Realty Finance intends to have its stock listed on the New York Stock Exchange under the ticker symbol "CBZ."
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