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Mad Money Spotlight: Cramer on Boston Properties

Jim Cramer recommends Boston Properties after the REIT announces a secondary offering of $2.25 million shares.

REITs are basically giving away free money in the form of secondary offerings. That, at least, was Jim Cramer's take during last night's "Mad Monday" broadcast.

Boston Properties

(BXP) - Get Boston Properties, Inc. Report

is the most recent real estate investment trust to jump on the bandwagon. Last week the company said it is offering 2.25 million shares of common stock at $50 each.

The company announced on Friday that it will sell a total of 17.25 million shares for about $841.9 million. The offering is expected to close June 10.

Recently, new fewer than 20 REITs of more than $500 million in value have issued secondary offerings, including

Vornado Realty Trust

(VNO) - Get Vornado Realty Trust Report

, as companies look to use cash to pay down debt, strengthen their balance sheets and prepare for future acquisitions.

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But investors are not paying attention to these deals, believing the hysteria that commercial real estate will be the next big crisis. Jim Cramer, on Monday's show, said he isn't buying the pessimism.

Of these 20 trusts, 10 are up 10% or more since they made the offering, while six are trending slightly lower. Only one company,

Health Care REIT


, is down more than 10%.

This, Cramer said, makes Boston Properties a safe bet; he believes the company isn't closing shop any time soon. Boston Properties also doles out a 5.4% dividend. Even if this pay out is cut as rumor indicates, the company would still yield 4%.

In the company's first quarter, which ended March 31, its earnings were nearly halved to $44.6 million, or 37 cents a share, from $84.5 million, or 71 cents. But funds from operations, a key gauge in in the real estate sector, jumped 3% to $134.8 million, or $1.11 a share, from $130.7 million, or $1.09 in the year-ago period. Revenue also increased 2% to $377.5 million from $371.4 million.

What's backing the company? Boston Properties owns offices in Manhattan, Boston, San Francisco and Princeton, N.J., most notably Time Square Tower, Prudential Center and 60% of GM building in New York.

Shares of Boston Properties are up slightly since the offering was announced, to close at $50.43 on Monday. But Cramer says the stock isn't staying at $50 for long, and expects to see some upside.