Key Takeaways:
National Healthcare Properties Inc. priced its initial public offering at $12.00 per share, missing its targeted range of $13.00 to $16.00 after institutional investors pushed for a lower valuation. The offering of 38.5 million shares is set to begin trading Wednesday on the Nasdaq.
"The final pricing at $12 reflects a cautious investor appetite for new real estate listings, even with a strong demographic tailwind," said a portfolio manager at a real estate-focused fund, who asked not to be named. "While the order book was oversubscribed, the market is clearly discounting illiquid assets that are transitioning to public markets."
The New York-based real estate investment trust (REIT) raised $462 million from the sale of its Class A common stock, with the potential to raise more if underwriters exercise an option for an additional 5.78 million shares. The final pricing gives the company a valuation below the roughly $1.1 billion it was targeting. The offering is being managed by a syndicate of banks including Wells Fargo & Co., Morgan Stanley, and Goldman Sachs Group Inc.
The IPO marks a significant liquidity event for long-term investors in the formerly non-traded REIT, which was launched in 2012 and managed by Nicholas Schorsch's American Realty Capital. The move to public markets comes as demand for senior housing and healthcare real estate is projected to rise with an aging U.S. population. However, the pricing below the initial range follows a difficult trend for similar listings, such as Bluerock Private Real Estate Fund, which saw its valuation drop sharply after its public debut.
This article is for informational purposes only and does not constitute investment advice.
