CapLease Inc. , a real estate investment trust (REIT), recently entered into a revolving credit agreement with Wells Fargo Bank, N.A for $100 million. The 3-year new credit facility is covered by 16 debt free assets inclusive of 11 Kroger grocery stores.
Following the closure of the facility, CapLease drew $53.1 million to repay debt on certain assets in the initial collateral pool. The company also reduced the size of its existing facility, which is now secured by amortizing mortgage assets worth $12 million.
This is a strategic financial arrangement for CapLease as it provides additional liquidity and enhances financing and refinancing flexibility. This will also enable the company to grow its owned portfolio and add new properties to its collateral pool. The company had $57.4 million in cash on hand as of March 31, 2012.
CapLease reported first quarter 2012 FFO (funds from operations) of 19 cents per share compared with 16 cents per share in the year-earlier quarter. Funds from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
CapLease is focused on financing and investing in commercial real estate that is net leased primarily to single tenants with investment grade or near investment grade credit ratings. It provides private and corporate owners of net lease real estate with equity, debt, and mezzanine financing option.
CapLease currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We also have a long-term Neutral recommendation on the stock. One of its competitors, Lexington Realty Trust (LXP - Snapshot Report) holds a Zacks #2 Rank, which translates into a short-term Buy rating.