Physicians Realty Trust ($DOC) is a REIT which will consist of 19 medical office buildings, that were only 83% leased as of March 31, 2013. DOC scheduled a $100 million IPO with a market capitalization of $138 million at a price range mid-point of $12.5 , for Friday, July 19, 2013.
Six other IPOs were scheduled for the week of July 15. The full IPO calendar can be found at IPOpremium.
- S-1 filed July 3, 2013
- Manager, Joint Managers: Wunderlich; Oppenheimer; Janney Montgomery Scott; JMP; BB&T Capital Markets
- Co Managers: Compass Point; J.J.B. Hilliard, W.L. Lyons; Ziegle
Summary
Revenue decreased 7% for 2012 vs 2011, and decreased 4% for Q1 ’13 vs Q1 ’13. Maybe there is something unfavorable happening relative to DOC’s local real estate markets.
|
Valuation Ratios |
IPO Mrkt |
Price / |
Price / |
Price / |
Price / |
% offered |
|
annualizing Q1 ’13 |
Cap (mm) |
Sls |
Erngs |
BkVlue |
TanBV |
in IPO |
|
Physicians Realty Trust (DOC) |
$138 |
13.8 |
-171.9 |
1.3 |
1.3 |
73% |
Conclusion
Avoid the DOC IPO. The financial trends are negative, and DOC will have a small market capitalization, which means most institutions won’t be interested.
Business
DOC is a self-managed healthcare real estate company recently organized to acquire, selectively develop, own and manage healthcare properties that are leased to physicians, hospitals and healthcare delivery systems.
The initial portfolio will consist of 19 medical office buildings located in ten states with approximately 528,048 net leasable square feet, which as of March 31, 2013 were approximately 83.1% leased with a weighted average remaining lease term of 7 years.
Dividend Policy
DOC does not state an expected distribution amount in the SEC filing.
Use of proceeds
DOC expects to net $91 million from its IPO.
Proceeds are allocated as follows:
• $36.9 million to repay existing mortgage indebtedness secured by certain of our initial properties, including accrued interest;
• $900,000 to pay certain debt transfer fees and fees relating to our anticipated credit facility;
• $850,000 to purchase the 50.0% joint venture equity interest in the Arrowhead Commons property not owned by the Ziegler Funds, resulting in our 100.0% ownership of this property; and
• the balance for general corporate and working capital purposes, including payment of expenses associated with the formation transactions.
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