STORE Capital Prices Offering, Anticipates Half-Billion in Proceeds

STORE Capital Corp. is going public and the net-lease REIT recently announced the pricing of its initial public offering of 27.5 million shares at $18.50 per share.
Christopher  Volk, STORE Capital

Christopher Volk, STORE Capital

STORE Capital Corp. is going public and the net-lease REIT recently announced the pricing of its initial public offering of 27.5 million shares at $18.50 per share. STORE expects net proceeds to total approximately $473.7 million, but if the underwriters exercise their option to acquire as many as an additional 4,125,000 shares, the figure would jump to roughly $545.5 million.

For STORE, the IPO has little to do with market timing. “STORE elected to go public at this time because we had deployed the private equity capital we had raised, which had enabled us to grow to $2.5 billion in assets over three and a half years,” Christopher Volk, CEO of STORE, told Commercial Property Executive.

For STORE, it’s all about growth. “Apart from this, there is really little ‘timing’ to think about when going public,” he added. Going public is a long-term decision, because companies like ours will expect to be able to access the capital markets in the future in order to continue to grow.”

STORE’s portfolio currently consists of 850 assets leased to 200 customers and more than 300 net lease contracts. The company’s guiding principal is diversity, with the goal of shielding the company as much as possible from downturns involving any particular customer, industry or region.

The REIT’s assets span 46 states and its customers range from movie theaters to furniture stores and other similar retail and industrial users, with no single customer representing more than 4 percent of the REIT’s portfolio. Transactions this year include a sale-leaseback with Advanced Control Systems Inc. for the automation systems manufacturer’s 49,400-square-foot office/warehouse facility in Norcross, Ga. STORE’s collection of assets also encompasses financial products, including net leases and mortgage loans.

Goldman, Sachs & Co., Credit Suisse and Morgan Stanley are serving as joint book-running managers for the offering, and the list of joint lead managers consists of Citigroup, Deutsche Bank Securities, KeyBanc Capital Markets and Wells Fargo Securities.

With STORE’s offering, according to IPO research firm Renaissance Capital, the company joins a short list of REITs that have launched IPOs this year. The group includes, City Office REIT, Farmland Partners and Bluerock Residential Growth REIT. STORE acknowledges that its move has implications–positive implications.

“The successful introduction of STORE into the public markets demonstrates that there is an interest in our sector,” Volk concluded. “But REITs are not just a conglomeration of assets.  In our case, the diversified assets we hold result from providing a service to our tenants, which is to offer them a preferable capital structure to real estate ownership.  The idea is to provide a win-win solution that benefits stakeholders and gives rise to the need for the REIT to be there. So, the listing of STORE illustrates that there is ample opportunity for companies filling real estate needs to attract capital.”


STORE expects the offering to close November 21.