Birmingham, Ala.-based multifamily real estate investment trust Colonial Properties Trust announced March 4 that the company had filed a prospectus supplement with the U.S. Securities and Exchange Commission to sell up to $50 million of the REIT's common shares via an "at-the-market" offering. At-the-market offerings—also called slow-mo or continuous equity offerings—occur over longer periods of time as brokers daily look to sell shares that meet the underwriting requirements of the offering's prospectus.
“The stock is being issued on a daily basis based on parameters we give to the underwriters to sell their shares for that day,” explains Colonial executive vice president of finance Jerry Brewer. “It could take 5 to 7 months to get the stock out, but the maximum we have per the prospectus is the $50 million.”
Colonial said it intends to use proceeds from the sale to both deleverage via a pay down of a portion of the balance on the REIT's unsecured revolving credit facility and to fund potential future asset acquisitions. “The initial proceeds will be used to pay down the debt, but we are actively looking for acquisition opportunities and will deploy that capital into those opportunities,” Brewer says. “Dispositions are in the hands of the lenders, and they have the say so on what happens to those properties. There's a lot of capital out there that needs to be put to work from a lot of different parties and down a lot of different avenues. That makes for the very competitive acquisition environment that we are seeing right now.”
Colonial is an owner and manager of a 34,320-unit apartment portfolio with assets located across the Southeast and Sunbelt regions of the U.S.