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SITE Centers (SITC) to Raise $198M From Common Share Offering

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Tapping the equity market for additional capital, SITE Centers Corp. SITC announced a public offering of 15 million shares of its common stock. Further, as part of the offering, the company will give underwriters a 30-day option to purchase up to an additional 2,250,000 shares.

The shares are priced at $13.20 per share for estimated gross proceeds of $198 million. The offering, subject to the fulfillment of customary closing conditions, is expected to close on Mar 4, 2021.

The company plans to utilize the net proceeds from the offering to fund the redemption of depositary shares representing its outstanding 6.250% class K cumulative redeemable preferred shares that have aggregate liquidation preference amounting to $150 million.

The remaining proceeds will be used for investments in short-term securities or to repay short-term borrowings.

While the share offering will preserve the company’s liquidity, it is expected to result in earnings per share dilution in the near term. Markedly, as of Dec 31, 2020, the company’s $905-million liquidity position consisted of $70 million of cash and $835 million available on its lines of credit.

Moreover, SITE Centers reported fourth-quarter 2020 operating funds from operations (FFO) per share of 25 cents that surpassed the Zacks Consensus Estimate of 24 cents. The reported figure, however, declined 24% year over year.

Also, same-store net operating income (NOI) declined 11.8% on a pro-rata basis in the fourth quarter, excluding redevelopment. The company reported a leased rate of 91.6% as of Dec 31, marking a contraction of 220 basis points from the prior-year quarter’s figure of 94.2% on a pro-rata basis.

Shares of this Zacks Rank #3 (Hold) company have gained 14.4% over the past year against the industry's fall of 0.2%.

Stocks to Consider

Extra Space Storage Inc.’s EXR Zacks Consensus Estimate for 2021 FFO per share has moved up 2.5% to $5.66 in the past week. The company currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Urban Edge Properties’ UE FFO per share estimate for the current year has been unchanged at 96 cents over the past month. The company carries a Zacks Rank of 2, currently.

JBG SMITH Properties JBGS Zacks Consensus Estimate for 2021 FFO per share has been unchanged at $1.48 in a month’s time. The company has a Zacks Rank of 2 at present.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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Urban Edge Properties (UE) : Free Stock Analysis Report

JBG SMITH Properties (JBGS) : Free Stock Analysis Report

SITE CENTERS CORP. (SITC) : Free Stock Analysis Report

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