Tuesday, March 09, 2010

New prospectisii?

Couple of new S-11's/N-2's out there.

Plainfield Direct

A Plainfield Direct is is an externally managed business development Company with a 2/20 (7% hurdle + catch up) management fee structure. CEO is Max Holmes is ex-DE Shaw/Drexel Burnham Lambert etc. Interestingly Since 1993, he has taught “Bankruptcy and Reorganization” at New York University Stern Graduate School of Business, where he remains an Adjunct Professor of Finance. Another member of the board of directors is also an adjunct professor of finance at the University of Chicago Graduate School of Business. This looks like a smart crew, but does the market really need any more 2/20 BDC's?

Welsh property trust

  • Vertically integrated real estate company with in house management abilitity, (Owned portfolio of 9.2 Million Sf, while providing services to another 17 million+ sf of externally owned real estate)
  • Targeting Office and Industrial properties.
  • Initial formation will involve the exchange of interests in various property investment funds for OP units of the new REIT. Shades of Douglas Emmet's pre-IPO drama. "We did not conduct arm’s-length negotiations with our principals with respect to all of the terms of the formation transactions. In the course of structuring the formation transactions, our principals had the ability to influence the type and level of benefits that they and our other officers will receive from us. In addition, we have not obtained any recent third-party appraisals of the properties and other assets to be acquired by us in connection with the formation transactions. As a result, the price to be paid by us to the prior investors, including our principals and certain of our executive officers, for the acquisition of the assets in the formation transactions may exceed the fair market value of those assets."
  • Industrial portfolio is in the central US rust belt "Our industrial properties are primarily located in the central United States. In our existing portfolio, approximately 8.6 million leasable square feet, or 93.1% of the total portfolio square footage, is within eight contiguous central U.S. states: Minnesota, Wisconsin, Iowa, Missouri, Michigan, Ohio, Indiana and Illinois." These are exactly the locations that the new Terreno REIT intends to avoid.
  • This is kind of an odd IPO, in that existing portfolio is in an unpopular part of an unpopular sector. The real estate services business is interesting. I really have no clue what the public valuation for this might be.

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