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REITs Exploring Options for Their Newly Raised Wealth

Three REITs Hire Investment Bankers To Explore Strategic Options
June 17, 2013
Following a year in which REITs raised a record amount of money in the capital markets, and a first quarter that saw fund raising exceed the earlier full-year period, some of those REITs are now starting to review alternatives for what to do with their holdings, and their cash.

Last week, two more REITs, Inland Diversified Real Estate Trust Inc. and Strategic Storage Trust Inc., announced they had retained investment bankers to review their strategic alternatives.

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Inland Diversified Real Estate Trust Inc. hired Wells Fargo Securities as its financial adviser to assist with the review process.

Inland Diversified completed its primary capital raise in August 2012 and fully invested all of its collected capital by Dec. 31, 2012. The next step in the company's strategic plan was to discuss a liquidity event for its stockholders, although the company has not made a decision to pursue any specific liquidity alternative.

Inland Diversified is a public, non-listed real estate investment trust that owns a diversified portfolio of commercial real estate assets, including: grocery-anchored shopping centers, necessity-based retail assets, single-tenant office and multifamily assets. As of March 31, it owned 142 properties totaling approximately 12.4 million square feet of commercial real estate, as well as 444 multifamily units, in 31 states, with a portfolio of approximately $2.4 billion in total assets.

Strategic Storage Trust Inc. engaged Citigroup Global Markets Inc. as its investment banker to assist in analyzing strategic alternatives.

It expects the primary offering portion of its follow-on offering to close this coming September.

In connection with the pending close, Strategic is exploring the possibility of becoming self-administered, althoug it, too, has not settled on pursuing any specific strategic alternative.

As of March 31, Strategic Storage Trust owned 110 properties in 17 states and Ontario, Canada with approximately 70,000 units and approximately 9.2 million rentable square feet.

The two trusts' decision to explore strategic alternatives comes a week after American Realty Capital Trust IV, hired Merrill Lynch and RCS Capital as financial advisors to evaluate strategic alternatives following the recent close of its $1.75 billion common stock offering.

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