Colony mortgage REIT raises additional $234.5m

Colony Financial raised the equity through a secondary offering after fully investing the proceeds of its $284m IPO and a $55.7m private placement.

Colony Financial has raised an additional $234.5 million through a share offering after investing more than $300 million of equity. The mortgage REIT, sponsored by Colony Capital, said it would use the capital from the 14 million-share offering to continue originating individual loans and acquiring portfolios of commercial mortgages, CMBS and mezzanine debt.

The REIT raised $284.6 million in its initial public offering in September 2009 and a further $55.7 million through a private placement of shares in December 2010. That capital has now been fully invested in a variety of loan portfolios and deals, including acquiring stakes in three Federal Deposit Insurance Corporation loan portfolios in December and January and originating a $37.4 million mezzanine loan in October secured against the Extended Stay hotel chain. 

Colony’s rival mortgage REITs, Apollo Global’s Apollo Commercial Real Estate Finance and Starwood Capital Group’s Starwood Property Trust, also have raised additional equity in follow-on offerings to help fund future deals. In September, Apollo raised an extra $110.4 million, while Starwood corralled an extra $434.8 million in December.

Among Colony Financial’s latest deals was the January acquisition of a 50 percent stake in a portfolio of 1,505 acquisition, development and construction loans being sold by the FDIC. The deal marked the REIT’s fifth FDIC structured sale and saw Colony Financial team up with other Colony funds to invest a total of $48.2 million of equity, of which the REIT committed $4.5 million.