Irvine Co. Holds Off on Its REIT Offering : Stock: Company cites tepid real estate investment trust market in postponing the much-anticipated sale.

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Citing less-than-inviting market conditions, the Irvine Co. said Tuesday it will delay the sale of shares in its much-anticipated real estate investment trust.

"We're going to postpone a decision until at least next week," an Irvine Co. official said Tuesday.

The entire REIT market, which closely follows the bond market, has seen prices decline dramatically in the past two weeks because of concerns that interest rates will rise, analysts said. Especially hard hit have been new issues, such as initial public offerings like the Irvine Co.'s planned sale.

A REIT allows investors to buy shares in a company that manages and owns a portfolio of real estate to make a profit for shareholders.

The Irvine Co., Orange County's largest landowner, has said it expects to raise $200 million by offering stakes in apartment properties. The REIT has drawn great interest from investors and analysts, not only because it is the first public venture by the privately held Irvine Co. but also because its pricing will indicate how Wall Street views a REIT comprised solely of Southern California apartment properties.

The REIT, called the Irvine Apartment Communities Inc., had expected to sell 10.6 million common shares priced between $19.50 and $21.50 apiece. The offering price was to have been finalized this week.

Because of adverse market conditions, however, several analysts predicted that the company may be wrangling over whether to slash offering prices, possibly below $19.50 a share.

Jill Holup, portfolio manager for the Liquidity Fund in Emeryville, which specializes in real estate securities, said she may buy shares in the Irvine REIT if prices are lowered.

"I think by next Monday they'll have decided on the pricing, and I think it will be priced much more attractively for investors," she said. If prices drop below $19.50 a share, the REIT would not raise the expected amount of cash from investors. That could make the deal less attractive because it would reduce the cash cushion on the REIT's balance sheet, said Craig Leupold, an analyst with Green Street Advisors, a Newport Beach firm that analyzes real estate securities.

To avoid that, Leupold said, the Irvine Co. may be forced to give up some of its 65% ownership stake in the REIT, allowing more shares to be sold to the public. That would make up for any possible reduction in the price per share, he said.

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