New REIT – Extended Stay America (STAY)
By: Tim McPartland,
Ticker Symbol STAY
Market Traded On NYSE
Minimum Quarterly Distribution Not announced
Offering Price $20.00
Initial Yield N/A
Company Website Extended Stay America
New REIT Extended Stay American started trading today (11/13/2013) and in a strange performance for a REIT traded up $3.87 from the IPO price of $20.
Extended Stay America is the first lodging REIT in quite some time to come to market and is sponsored by owners Blackstone LP and Paulson and Co. who bought the company out of bankruptcy in 2010. The IPO represents only about an 17% ownership stake.
STAY is a large REIT with over $4 Billion in assets and this IPO values the company at over $4 billion. The company runs over 600 moderately priced extended stay hotels/motels.
Certainly the market has high expectations for a new REIT without a stated minimum distribution (the pro forma financials would seem to imply a distribution in the neighborhood of $1.50/share per year–a 7.5% yield on the offering price).
The offering documents are below.