AmREIT IPO Debuts With a Thud

AmRIET, Inc. (NYSE: AMRE) is managing to hang in around the initial public offering price.  Still, Wall Street (and/or Main Street) might lump this in as a disappointing IPO.  The company priced an upsized IPO at 3.65 million Class B shares versus a prior plan to offer 3.4 million shares.  Where the disappointment comes into play is that the pricing was at $14 per share.  That was at the low-end of the $14 to $16 range that the underwriters initially gave.

AmREIT owns, operates, acquires and selectively develops and redevelops primarily neighborhood and community shopping centers located in high-traffic, densely populated, affluent areas with significant barriers to entry.

Jefferies and Baird acted as the joint book-running managers for the initial public offering; Wunderlich Securities, J.J.B. Hilliard, W.L. Lyons, and PNC Capital Markets were listed as co-managers on the deal.  AmREIT has granted the underwriters a 30-day overallotment option (or a green shoe option) to purchase up to an additional 547,500 shares of Class B common stock at the public offering price to cover over-allotments.

These low-float IPOs are often a mixed bag and the gross proceeds here were only $46.3 million.  As far as the use of proceeds the REIT said that it “intends to use the proceeds of the offering to repay secured debt obligations and for general corporate and working capital purposes, including future acquisition, development and redevelopment activities.”

At least these shareholders aren’t getting pounded today.  Ay 11:30 AM EST we have AmREIT shares at $14.04 on 896,000 shares.

JON C. OGG