(Reuters) – What could be the busiest week for U.S. initial public offerings in nearly two years got off to a disappointing start on Tuesday when two IPOs by real estate investment trusts created to buy distressed mortgage assets delayed the pricings of their planned IPOs.
Both Colony Financial Inc (CLNY.N) and Apollo Commercial Real Estate Finance Inc (ARI.N) had planned to price their respective IPOs on Tuesday and begin trading on the New York Stock Exchange the next day, but the pricings were delayed by a day, underwriters for the deals said, declining to say why.
The postponements could be a signal of weak demand caused by a glut of similar REITs that have come to market this year and others in the pipeline, an analyst said.
“These (IPOs) are tripping over themselves for the same distressed dollar,” said Scott Sweet, a senior managing partner at advisory firm IPO Boutique.
Colony Financial, which would be managed by a unit of real estate investment firm Colony Capital LLC, is trying to raise $500 million to acquire, originate and manage a portfolio of real estate-related debt instruments. Apollo Commercial Real Estate is aiming for $400 million.
A third REIT created to invest in toxic assets, Foursquare Capital Corp (FSQR.N), is set to price Thursday, while Ladder Capital Realty Finance Inc (LCG.N) aims to go public next week.
The belief that distressed mortgage assets are priced at a discount with significant potential upside has led a number of large investment firms to create REITs to buy up those assets. [ID:nN18263803]
This week’s REITs seek to join six others that have come to market in 2009. But not all have been met enthusiastically by investors.
Last week, an IPO by REIT Crexus Investment Corp (CXS.N), managed by a unit of Annaly Capital (NLY.N), shrank its IPO by 60 percent on the day of its pricing.
If Colony and Apollo do price, along with six other IPOs planned for this week, it will be the week with the most U.S.-listed IPOs since December 2007. (Reporting by Phil Wahba; Editing by Richard Chang, Gary Hill)