8-K: CTO Realty Growth Prices $30 Million Preferred Stock Offering

CTO Realty Growth, Inc. has entered into an agreement to issue and sell 1,500,000 shares of its 6.375% Series A Cumulative Redeemable Preferred Stock at a public offering price of $20.00 per share.

Summary

• CTO Realty Growth, Inc. has agreed to sell 1,500,000 shares of its 6.375% Series A Cumulative Redeemable Preferred Stock.
• The public offering price is set at $20.00 per share, with a liquidation preference of $25.00 per share.
• The company has granted underwriters a 30-day option to purchase an additional 225,000 shares to cover over-allotments.
• The underwriters exercised their option to purchase 218,417 additional shares on April 9, 2024.
• The total offering is expected to close on April 11, 2024, and will include 1,718,417 shares of Series A Preferred Stock.
• The newly issued shares will be treated as a single series with the existing 2,978,808 outstanding shares of Series A Preferred Stock.

Sentiment

Score: 7

Explanation: The document indicates a positive development for the company, with a successful capital raise through a preferred stock offering. The exercise of the underwriters' option suggests strong demand. However, the document is a standard financial announcement, so the sentiment is not extremely high.

Positives

• The offering provides CTO Realty Growth with additional capital.
• The underwriters' option exercise indicates strong demand for the preferred stock.
• The offering is expected to close quickly, on April 11, 2024.

Risks

• The closing of the offering is subject to customary closing conditions.
• There is a risk that the underwriters may not be able to sell all of the shares.

Future Outlook

The offering is expected to close on April 11, 2024, subject to customary closing conditions.

Industry Context

This offering is a common method for REITs to raise capital, particularly for funding acquisitions or development projects. The issuance of preferred stock is a way to raise capital without diluting common shareholders.

Comparison to Industry Standards

• The 6.375% dividend rate is within the typical range for preferred stock issued by REITs.
• The offering size of 1.7 million shares is a moderate size for a REIT of CTO Realty Growth's market capitalization.
• The use of an underwriter to manage the offering is standard practice in the industry.
• The offering is similar to other preferred stock offerings by REITs, such as those by AGNC Investment Corp. and Annaly Capital Management, which also offer fixed-rate cumulative preferred stock.

Stakeholder Impact

• Shareholders will see an increase in the company's capital base.
• Preferred shareholders will receive a fixed dividend payment.
• The company will have additional funds for operations and growth.

Next Steps

• The offering is expected to close on April 11, 2024.
• The company will use the proceeds as specified in the prospectus.
• The company will seek to list the new shares on the NYSE.

Key Dates

Keywords

Preferred Stock, CTO Realty Growth, Underwriting Agreement, Public Offering, Series A Preferred Stock, Capital Raise, Real Estate Investment Trust, REIT