Massive Secondary Offering and Rise in Dividend, What this Means for Gramercy Property Trust Inc. (NYSE:GPT)


Gramercy Property Trust Inc. (NYSE:GPT) is a REIT company, or Investment Trust that deals with Real Estate and they primarily deal with office and industrial properties. Recently, Gramercy Property Trust Inc. (NYSE:GPT) declared that they are having a secondary offering and also plan to raise their dividend rate.

A sum of 45 million shares will be offered to public, with overallotment option of additional 6.75 million shares. The underwriters are Morgan Stanley (NYSE:MS) J.P Morgan (NYSE:JPM), Bank of America (NYSE:BAC), Merrill Lynch and RBC Capital Markets.

Yahoo! Inc. (NASDAQ:YHOO) says that Gramercy Property Trust Inc. (NYSE:GPT) has previously floated 102.23 million shares. Their Security Exchange Commission filing shows that around 171,953,595 or 178,703,595 common shares will become outstanding, after this offering due to the full overallotment. Bottom line is that this is a very huge secondary offering if one compares it with the outstanding shares, and the shares being sold.

The Gramercy Property Trust Inc. (NYSE:GPT) press release shows how the proceeds will be used.  According to the text: “Gramercy Property Trust Inc. (NYSE:GPT) will use a portion to pay the outstanding borrowings, will provide funds for the cash purchase of 12 single-tenant net lease assets, which were acquisitions announced previously and they will also provide funds to acquire the then other properties it currently has under contract.”

Dividend of $0.05 per share for the 2014 fourth quarter was also declared by the board of directors, with an increase of 43% compared with the last quarter’s dividend. The new dividend will be paid to the holders on Jan, 15. 2015, because Gramercy Property Trust Inc. (NYSE:GPT) closes its business on December 31, 2014.

Hike in preferred stock dividend:

Dividend on 7.12% Series B Cumulative Redeemable Preferred Stock was declared by the Board of Directors, with the original issued date. This also includes December 31, 2014, for the amount of $0.67292 per share. This is payable on December 31, 2014 to its preferred stockholders as the business close on December 15, 2014.  The 2015 outlook of Gramercy Property Trust Inc. (NYSE:GPT) was announced for the operation core funds of $0.45 to $0.50. According to this, the assumption is that asset management will contribute $4.4 million, which is net of tax to its business with an effective 36% tax rate. Expenses for General Administration and Management are likely to be $17 million in 2015. Finally for Gramercy Property Trust Inc. (NYSE:GPT) the acquisition for 2015 will have $600 million to $900 million aggregate gross purchase price.

After these announcements were made by Gramercy Property Trust Inc. (NYSE:GPT), the share prices fell in the premarket trading to 3% to $5.60, in response. The Price target for the stock of Gramercy Property Trust Inc. (NYSE:GPT) is $7.05 and range of trading for 52-week is $4.96 to $6.46, with $716 million market cap.

Gramercy Property (NYSE:GPT)’s strategies are quite ambitious and seem to have put it on the right track. It currently looks like a good stock that can offer great value for investor dividend.