Schottenstein: REIT to IPO

COLUMBUS, Ohio ( TheStreet) -- The IPO market continues to pick up steam with real estate investment trust Schottenstein Realty set to hit Wall Street on Friday.

Schottenstein owns and operates community and neighborhood shopping centers in major metropolitan centers across the U.S., mostly anchored by national retailers. The company often looks for acquisitions of distressed retail properties with the intention of redeveloping them and then bringing in big-box retailers like Wal-Mart ( WMT), Bed, Bath & Beyond ( BBBY) and T.J. Maxx ( TJX).

Under the ticker SCRT, Schottenstein's initial public offering is expected to be priced Friday between $14 and $16 per share, following a registration five-month period at the Securities and Exchange Commission.

Around 26.7 million shares will be offered, raising between $364 million and $420 million in gross proceeds, according to SEC filings.

Schottenstein said it will use $190 million of the raised capital to consolidate interest in properties it does not wholly own, $126 million to pay down corporate debt, and $27 million for working capital and to fund acquisitions.

In December 2010 Schottenstein filed with the SEC that it hoped to raise $517.5 million through an IPO.

Raising less capital than expected may be a reality Schottenstein is forced to face on Friday.

On Wednesday of this week, RLJ Lodging Trust ( RLJ), a self-advised REIT that invests in hotels, began trading on the New York Stock Exchange, selling 27.5 million shares for $18 apiece, lower than the $19 to $21 expected.

RLJ, formed by former Hilton executives, raised $495 million. It told the SEC it would own 140 hotels in 19 states under recognized brands including Marriott ( MAR), Hyatt ( H) and Hilton.

Reports in April showed that New York City's Empire State Building may be the next iconic brand to trade publicly on an exchange .

The new company would also likely include other office buildings, including 1 Grand Central, a 55-story, 1.3-million-square-foot building near Grand Central Terminal, a 26-story building at 250 West 57th Street, as well as six buildings in Westchester County and Connecticut, according to three sources who had been briefed on the plans spoke but anonymously to the New York Times.

The group of buildings potentially involved in this IPO are controlled by Anthony E. Malkin and his father, Peter L. Malkin. Their principal partner is the estate of Leona Helmsley.

-- Written by Miriam Marcus Reimer in New York.

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