Capital Lease Funding has marked a major shift in strategy. The 10-year-old firm, which originated and sold securitized pools of net-lease properties, became a net-lease real estate investment trust (REIT) with an initial public offering of 20 million shares for $10.50 per share on the New York Stock Exchange in March.
The REIT, which trades under the symbol LSE, now focuses on buying and owning net-leased properties. That includes financing equity investments in properties subject to long-term net leases, along with debt and mezzanine investments.
CFO Shawn Seale, President Bill Pollert and CEO Paul McDowell (pictured from left to right) were present at the company's IPO March 19. “This company has enormous brand-name recognition in the marketplace,” says Pollert, who credits his management team as the cornerstone of the firm's strength. He believes that Capital Lease Funding's new direction will strengthen its flexibility in originating net-lease assets while fetching strong returns on invested capital. Four days after the IPO, the lead underwriters of the IPO exercised an over-allotment plan to buy an added 3 million shares of common stock at $10.50 per share.
The IPO underwriters included Wachovia Securities, Friedman Billings Ramsey and RBC Capital Markets. Since 1996, Capital Lease Funding has financed $2.5 billion of credit-tenant lease transactions involving 500 properties.