This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Net Lease Sector Endures More Consolidation

The proposed deal with CapLease will provide one of the few missing components for ARCP's growing net lease brand: management. In short, I have often suggested that ARCP would become a great REIT as soon as it builds out a management team and now that ARCP is rolling up LSE's management team, I believe that ARCP has all of the ingredients to become a dynamite dividend brand.

The synergies between ARCP and LSE will provide not only a sound financial structure (ARCP will also increase its percentage of investment grade tenants) but also a fully-integrated operating platform, that in my opinion, has been the missing link for the three-year old REIT.

Also, ARCP has continually paid out dividends (three increases this year) and the impact with the proposed LSE is expected to be highly accretive by around 10%. ARCP's payout ratio is around $.94 and the revised earnings (mid-point guidance of $1.19) forecast will reduce the payout ratio and provide meaningful safety for dividend investors.

The merger is still not official until the end of the "go-shop" period commencing immediately and ending on July 7, 2013. The merger agreement does provide for a termination fee and expense reimbursement of $15 million if CapLease terminates (and elects to accept a superior bid).

At the time of publication, the author had no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
LSE $0.00 0.00%
ARCP $8.10 0.93%
AAPL $110.88 2.90%
FB $89.09 2.10%
GOOG $608.28 1.80%

Markets

Chart of I:DJI
DOW 16,256.64 +198.29 1.23%
S&P 500 1,934.54 +20.69 1.08%
NASDAQ 4,700.4080 +64.3030 1.39%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs