Equity One to Offer Common Shares - Analyst Blog

Equity One Inc. (EQY), a real estate investment trust (REIT) engaged in the ownership, management, and development of neighborhood and community shopping centers in the U.S., has recently announced its offer of 8 million common shares at $16.90 per share. The company will also grant the underwriters an option to purchase an additional 1.2 million shares to cover any over-allotments.

Barclays Capital Inc., the investment banking division of Barclays plc (BCS), is acting as the sole book-running manager for the offering. Equity One intends to utilize the net proceeds from the secondary offering to repay debt and for general corporate purposes.

As of September 30, 2010, Equity One owned 189 properties spanning 19.5 million square feet of space. The majority of the shopping centers owned by Equity One are anchored by leading supermarkets, pharmacies and large retail stores. The company has a diverse tenant mix – a hedge against tenant concentration risk, thereby ensuring a steady source of income.

In addition, bulk of the company's portfolio is located in some of the most densely populated and highest growth areas of the country with high barriers to entry. These include the metropolitan areas around Miami, Fort Lauderdale, West Palm Beach, Jacksonville, Orlando, Atlanta, Georgia, Boston and New York. Consequently, the shopping centers generate relatively strong sales with solid trade area demographics.

We have a ‘Neutral' rating on Equity One, which presently has a Zacks #3 Rank translating into a short-term ‘Hold' rating and indicates that the stock is expected to perform in line with the overall U.S. equity market for the next 1–3 months.

 
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