Arbor Expects to Raise $135M in IPO

UNIONDALE, NY-Arbor Realty Trust expects to raise $135 million in its Initial Public Offering. The REIT, based here, priced each share of common stock at $20. Of the more than 6.27 million shares sold in the offering, 6.25 million are being offered by Arbor and 22,500 are being offered by a stockholder. (The company will not receive any of the proceeds from the shares sold by the stockholder.) In addition, Arbor is offering 500,000 shares to Kojaian Ventures LLC, which is wholly owned by Arbor director C. Michael Kojaian.
Last July, Arbor CFO Rick Herbst told GlobeSt.com he anticipated that within a year, the REIT, organized in 2003, would become a public company and be on the road to raising $1 billion in assets over the next three years. At the time, the firm had just completed a private financing that combined with a concurrent equity contribution by Arbor Commercial Mortgage LLC totaled approximately $165 million.
Now Herbst notes that the firm is “well ahead of that $1-billion goal.” He says the market has been very receptive to Arbor product and that there hasn’t been as much competition as company officials had originally thought. “Two-thirds are repeat customers,” he tells GlobeSt.com, adding that the company will now have more opportunity to do longer-term loans.
Common stock began trading April 7 on the New York Stock Exchange under the symbol “ABR.” Underwriters have an option to purchase up to an additional 937,500 shares to cover over-allotments. The offering is expected to close on April 13. Net proceeds will be used for the repayment of indebtedness under an existing credit facility and a master repurchase agreement. The offering was led by Wachovia Securities; UBS Investment Bank and JMP Securities acted as co-managers.
Based here, the Maryland-organized REIT was formed to invest in bridge and mezzanine loans, preferred equity and, in limited cases, discounted mortgage notes and other real estate-related assets.