Alexander Mortgage REIT files for IPO, expects proceeds of $300 million
Alexander Mortgage REIT Inc. expects to raise up to $300 million from an initial public offering. The new Maryland-based real estate investment trust plans to invest in, acquire and manage a diversified portfolio of residential mortgage assets, as well as real estate-related securities and financial assets with the funds from the offering, according to an filing with the Securities and Exchange Commission. Alexander Mortgage ultimately plans to hold both investment and noninvestment grade, nonagency residential mortgage-backed securities in its portfolio. However, initially the company intends to invest significant proceeds in federally backed assets, including securities from Ginnie Mae, Fannie Mae and Freddie Mac. Alexander Mortgage will be externally managed by AG REIT Management, a new subsidiary of New York-based Angelo, Gordon & Co. Angelo, Gordon is a privately held investment adviser that specializes in alternative investments, or investments with little correlation to market indices. Examples include distressed assets and private equity. No underwriters were named on the Alexander IPO and the date of closing is indeterminate. One representative said closing depends on market conditions and when they are optimal for the offering. The market is proving to be a bit temperamental for real estate investment trusts. While Barclays Capital said recently that things are gradually improving for REITs, their average funds from operations missed the firm's expectations, coming in with cumulative growth of 14.6% for the fourth quarter compared to an estimate of 20.4%. Barclays analysts forecast a 16.6% increase in FFO for 2011. Less than a month ago, Keefe, Bruyette & Woods reported more than half of REITs it tracks exceeded earnings expectations in the fourth quarter. Only eight fell short. Write to Christine Ricciardi. Follow her on Twitter @HWnewbieCR.