Ladder Capital has withdrawn its IPO for a mortgage REIT after rival firms failed to raise more than half their expected equity targets.
The firm, led by Brian Harris, had planned to price the IPO of Ladder Capital Realty Finance this week however a poor showing by Colony Capital and Apollo Global Management may have prompted a u-turn.
Colony raised $255 million for Colony Financial while Apollo raised $200 million for Apollo Commercial Real Estate Finance. Both firms had targeted $500 million and $600 million, respectively.
Starwood Capital’s Starwood Property Trust was the first vehicle to target the public markets for equity, raising $310 million more than its $500 million original target. That result prompted a wave of other private managers to look to public equity as a means of fundraising.
But people familiar with the situation told PERE investors were cautious over the private equity real estate-style fees involved in the mortgage REITs and that the window of opportunity for raising equity in this manner was “very short indeed”. That window now appears to have closed.
Media reports also revealed that AllianceBernstein has withdrawn its plans for a mortgage REIT, Foursquare Capital Corp.
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