If the listing in the form of REIT or Real Estate Investment Trust takes place in this year, it will be the 3rd largest US IPO for the year 2012, behind Banco Santander’s Mexican unit and Facebook Inc.
Filings of Archstone didn’t reveal the number of shares that the company planned to sell. Few analysts estimated that the company is worth about USD 16 billion, but the company is selling the assets and is difficult to find the value. Archstone has got large and attractive portfolios of the properties.
The huge stake of Lehman in the company is estimated at USD 6 billion – USD 7 billion and the sale of the stake must take place under the bankruptcy. Andrew McCulloch, senior analyst said that there are lots of expectations from the deal.
Archstone is listed on the stock exchange with ASN; it can also avoid the corporate level pay if it starts distributing 90% of the taxable income to the shareholders in the dividend form.
IPO will closely watch the condition of the real estate companies and their performance, and then analyse how well these companies do in the public offering.
Prime Property
Archstone has owned interest in almost 169 US apartment communities as of 30th September, located in all the coastal areas that have got very good rents. Most are in San Francisco Bay Area, Southern California, Washington DC metropolitan areas, and Southeast Florida.
Average monthly rent for the Archstone apartment in these areas was around $2,408 in the 3rd quarter, for the complete portfolio, and the average monthly revenue for the apartment was around USD 2,168 and occupancy rate was around 94.2%.
Archstone in Colorado, Englewood has got 12 more communities, and 3,506 apartments under construction. It owns the land for 28 developments and has got interest in ten apartment properties in Germany.
Tishman Speyer and Lehman acquired Archstone Smith, one amongst the largest owners of United States apartments, via a USD23.7 billion leveraged buyout in the year 2007.
As the real estate values went down and the credit began to sink, Archstone could not sell the buildings for repaying some of the loans. Its lenders ended up in acquiring the company in the year 2010, with Lehman getting 47% and other banks in combined 53 %.
By 2013, Archstone is expecting to sell $1 billion of additional properties, in the substantial portion that is already in the market.