Highlights
Peakstone Realty Trust, formerly Griffin Realty Trust, Inc., listed its common stock on the New York Stock Exchange on April 13, 2023.
The stock opened at $8.00 and closed the first day of trading at $11.65. On April 19, 2023, the stock closed at $40.44 after reaching a 52-week high of $47.00; the dividend yield at the closing price was 2.2% (based on a $0.90/share annual dividend).
Adjusted for the one-for-nine reverse stock split, the April 19, 2023 closing price represented a 51% discount to the final public offering price in Peakstone’s follow-on offering of $82.89 per share and a 40% discount to Peakstone’s most recent net asset value of $66.87 per share.
Peakstone Realty Trust is the remaining and combined entity which emerged through the transaction in which Griffin Capital Essential Asset REIT, Inc. completed the merger with and into Griffin Capital Essential Asset REIT II, Inc.
Peakstone previously completed the acquisition of Cole Office & Industrial REIT (CCIT II), Inc. for approximately $1.3 billion in a stock-for-stock transaction on March 1, 2021.
On April 13, 2023, Peakstone Realty Trust (“Peakstone”), an internally managed, non-traded real estate investment trust (“REIT”) that owns and operates predominately single-tenant industrial and office properties, listed its shares of common stock on the NYSE under the ticker symbol “PKST.”
From September 23, 2014 to January 20, 2017, Peakstone raised $724.0 million in gross proceeds through its initial public offering, excluding DRIP. From September 20, 2017 to September 20, 2020, Peakstone raised $23.1 million in gross proceeds through its follow-on public offering, excluding DRIP.
Peakstone is the surviving entity after Griffin Capital Essential Asset REIT, Inc. (“GCEAR”) merged with and into Griffin Capital Essential Asset REIT II. Prior to the merger, Peakstone was externally advised by affiliated entities that provided services to the fund, including asset acquisition and disposition decisions, asset management, operating and leasing of properties, property management, and other general and administrative responsibilities. As a result of the merger, Peakstone became a self-managed REIT.
Additionally, on March 1, 2021, Peakstone completed the acquisition of Cole Office & Industrial REIT (CCIT II), Inc. (“CCIT II”), a non-traded REIT that raised $661.6 million in proceeds from September 17, 2013 through September 17, 2016, for approximately $1.3 billion in a stock-for-stock transaction. At the effective time of the acquisition, each outstanding share of CCIT II’s Class A and Class T common stock was converted into the right to receive 1.392 shares of Peakstone’s Class E common stock.
On February 21, 2023, Peakstone announced that it was suspending its share redemption program in conjunction with the listing. Additionally, on March 10, 2023, Peakstone effected a 1-for-9 reverse split of its shares of common stock. As a result, every nine shares of Peakstone common stock issued and outstanding was automatically combined into one share of Peakstone common stock. Peakstone’s most recent net asset value per share of $7.43 was calculated as of June 30, 2022; after giving effect to reverse stock split, the NAV as of that date would have been estimated to be $66.87 per share.
The following table presents a summary of estimated hypothetical returns with respect to the listing for Class A investors from Peakstone’s initial offering, based on the following scenarios, assuming an exit: (i) on the listing date at a price equal to the most recently announced NAV per share; (ii) at the opening price on the listing date (also representing the 52-week low); and (iii) at the 52-week high on April 19, 2023:
The following table presents a summary of estimated hypothetical returns with respect to the listing for Class I investors from Peakstone’s follow-on offering:
The following table presents a summary of hypothetical returns with respect to the listing for investors from GCEAR’s offering:
The following table presents a summary of hypothetical returns with respect to the listing for Class A investors from CCIT II’s offering:
While these estimated returns present a range of potential returns between the high and low share price since trading commenced, the share price has more recently traded between $20-30 per share. There are a variety of factors that may be contributing to shares of Peakstone trading at prices that seem to reflect a discount from its most recent estimated NAV per share, including: (i) office REITs are generally trading at a discount to NAV (according to S&P Global, approximately 53.1% as of March 31, 2023); (ii) technical pressures upon listing due to shares being sold by shareholders that have long been limited in their ability to liquidate their investments in the fund; and (iii) impairment provisions related to both real estate and goodwill reported by Peakstone subsequent to the most recently estimated NAV per share.
Sources
SEC Company Filings for:
BusinessWire.com, Peakstone Realty Trust Announces Listing of Common Shares on the New York Stock Exchange
Nasdaq.com, Historical Quotes
S&P Global, NAV Monitor: US equity REIT median discount to NAV increases to 20.2% in March
SK Research and Due Diligence, The Non-Traded REIT Report – 2nd Quarter 2019
SK Research and Due Diligence, The Non-Traded REIT Report – 2nd Quarter 2021