Commercial REIT FrontView valued at $488 mln as shares drop in NYSE debut
Adds analyst comment in paragraph 6
By Vedant Vinayak Vichare
Oct 2 (Reuters) -Shares of FrontView REIT FVR.N fell 3.9% in their debut on the New York Stock Exchange on Wednesday, valuing the commercial real estate investment trust at $487.9 million.
The Dallas, Texas-based company's shares opened at $18.25, below the initial public offering price of $19 apiece. It sold 13.2 million shares in the IPO, raising $250.8 million.
With the U.S. Federal Reserve joining major economies in cutting interest rates, analysts expect REITs to be among theprime beneficiaries, as lower rates make financing real estate deals easier.
FrontView went public before U.S. voters go to polls, joining a host of companies looking to get ahead of the potential uncertainty from the Nov. 5 presidential election.
U.S. IPO market proceeds have totaled $26 billion in the first nine months of 2024, marking its best year since the IPO boom in 2021, according to data compiled by LSEG.
"With FVR, its valuation hinges on some ambitious growth plans and the ability to improve profitability, so there's some uncertainty there," said Matt Kennedy, senior strategist at Renaissance Capital.
Cold storage provider Lineage LINE.O, which marked the year's biggest stock market listing and the largest U.S. REIT IPO ever, went public in July and is trading slightly below its IPO price as of last close.
FrontView focuses primarily on investing in properties facing high-traffic roads that are highly visible to consumers. It holds a portfolio of 278 properties in the United States, with an occupancy rate of about 99%, as of June 30.
The company mainly seeks tenants whose business operations are service-oriented such as quick-service restaurants, automotive stores and dealers as well as medical and dental providers.
Founded in 2016 by Stephen Preston, FrontView's tenants include Starbucks SBUX.O, telecom company AT&T T.N, Bank of America BAC.N and drugstore chain operator Walgreens WBA.O.
Reporting by Vedant Vinayak Vichare and Arasu Kannagi Basil in Bengaluru; Editing by Shilpi Majumdar and Mohammed Safi Shamsi
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