Santa Anita Realty Details Plan to Create REIT
Santa Anita Realty Enterprises Inc. on Tuesday announced details of its plan to spin off its multifamily housing and industrial properties through a new real estate investment trust called Pacific Gulf Properties Inc.
The REIT, which plans to raise $101 million by selling shares to the public, was organized to include properties in Southern California, Texas and the Pacific Northwest. It will be based in Newport Beach.
Many developers--most recently the Irvine Co.--are announcing plans to form REITs to raise cash by selling ownership shares in real estate or mortgages.
Santa Anita Realty, an investment trust, shares its trading symbol on the New York Stock Exchange with Santa Anita Operating Co., which runs a horse-racing track in Arcadia. Santa Anita said in June that it would spin off its apartment and industrial properties in a separate REIT.
The Pacific Gulf REIT plans to sell 5.25 million common shares for $19.50 to $22.25 each in an offering underwritten by Alex Brown & Sons, Prudential Securities Inc. and Crowell Weedon & Co. Of the $101 million in estimated net proceeds, $44 million will be used as a partial payment for Santa Anita’s properties, $41 million will be used to repay a mortgage debt on Santa Anita’s properties, and $16 million will be used to buy more properties. Shares of Pacific Gulf are expected to trade on the New York Stock Exchange.