ARTIS REIT's preferred units appear to be hot commodities these days.
The Winnipeg-based real estate investment trust announced Tuesday it signed an agreement to sell two million of its Series E preferred trust units to a syndicate of underwriters led by RBC Capital Markets and CIBC for $25 per share. The net proceeds for Artis would be $50 million.
A few hours later, Artis issued a second release saying "due to increased investor demand," it was doubling the size of the offering to four million units. That doubles the net proceeds to $100 million.
The trust said it plans to use the money to pay down debt, fund future acquisitions, "and for general trust purposes."
This isn't the first time Artis has upsized one of its preferred-unit offerings. On one previous occasion, it bumped up the original $50-million offering to $75 million, and on another it increased it to $62.8 million from $50 million. But this is the first time the original offer was doubled in size.
Real estate products are in demand by retail investors, so that's likely one reason for the strong response to the Artis offering. Preferred-unit offerings by Canadian REITs aren't all that common, so that could be another reason.
As well, Artis announced late last month it has qualified for an investment-grade credit rating -- BBB (low) and Pfd-3 (low) -- from DBRS Ltd. It said Tuesday DBRS has assigned a provisional rating of Pfd-3 (low) to the Series E units.
-- Murray McNeill