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Inland American and CapLease Talking?


According to an SEC filing, Inland American Real Estate Trust, one of the Inland Real Estate Group of Cos., is in talks with CapLease about a merger or purchasing all of its assets. On September 16, Inland purchased 1.3 million shares of CapLease Inc. at $7.59 per share. That's $10 million. Overall, Inland American now owns 9.9 percent of CapLease due to previous transactions. It previously bought a chunk of stock from the company back in July.

Update 4:51 PM: A closer look at SEC filings clears up the picture a bit. CapLease used the $10 million to pay down some short-term debt. The stock sold was a new offering. So it issued new stock, sold it to Inland American and used the proceeds to lower its debt levels. The terms give Inland the right to talk further with CapLease, but it doesn't mean anything definitive will happen. It does seem like a smart move overall. In this environment, anything you can do to pay down debt is a good move. And this didn't involve selling assets, although it did mean CapLease did dilute its share base a little. On the flip side, it establishes a partnership between two firms that could be the basis of more action.

It should be noted, as well, that his happened on Sept. 16, according to the filing. The stock market since then has plummeted dramatically and then rebounded dramatically. CapLease is up to $9.10 per share. But it's hard to imagine that the activity with Inland had anything to do with that. REIT stocks in general have fluctuated wildly this week.

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Elaine Misonzhnik

Senior associate editor Elaine Misonzhnik has been writing for National Real Estate Investor since June 2006 and has covered commercial real estate for more than 12 years. She first became...
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