A real estate investment trust, Chambers Street Properties (NYSE:CSG) has been added to the Retirement Income Portfolio. An initial purchase (representing about 1% of the portfolio) was made on the stock's first day of trading on the New York Stock Exchange.
Chambers Street was formed in 2004 as the CB Richard Ellis Trust. The President and CEO is the founder, Jack Cuneo. The company's website (www.chambersstreet.com/) indicates that it owns 129 properties in 22 states, the UK and Germany.
The company has more than $3 billion in assets, with over 98% of its 34 million square feet leased by 272 tenants in more than 25 industries.
The company began trading on the NYSE on Tuesday, May 21 at $10.00. Unlike most initial public offerings, where the company sells new shares or the original investors sell their shares via the IPO, CSG's listing coincided with a tender offer from CSG to purchase up to $125 million of its common shares between $10.10 and $10.60 per share. It's likely that the company's participation in the market on the "buy" side helped provide a floor for the stock, which traded in a close range on the first two days of trading, closing at $10.00 (unchanged) on May 21 and $9.99 on May 22.
I learned about Chambers Street from Brad Thomas' May 3 2013 Seeking Alpha article, "Chambers Street: More Liquidity Magic On the Way in REIT-Dom" (seekingalpha.com/article/1397961-chamber...).
Brad also contributed a May 8 2013 article to TheStreet, "For a Hot New REIT, Go to Chambers Street," (www.thestreet.com/story/11918148/1/for-a...), which includes a video interview of CEO Jack Cuneo. The company's portfolio is 25% office and 25% industrial. Its largest tenant is Amazon (6.6%). About 56% of the rent base is from property leased to investment grade rated tenants. About 82% of the square footage is leased to single tenants on a triple-net basis.
Total assets at March 31 2013 were $2,866,877,000. Total liabilities were $1,181,915,000. There were 248,400,000 common shares outstanding. Chambers Street will pay a 12.5 cent quarterly dividend, or 50 cents annually, for a 5% yield at the initial pubic price of $10.00.
This is not a recommendation to buy CSG, but this is presented as a suggestion for a stock to study.
Since my last report, I have continued to raise cash, which now accounts for 18% of the portfolio.