NEW YORK ( TheStreet) -- It's easy to be blase about Colony Financial's ( CLNY) plan to spin off Colony American Homes (CAH), given the slump in many housing stocks and the fact that Colony ended up canceling an IPO of the business a year ago.
Still, there are reasons to think CAH, a portfolio of 16,000 single-family homes that is one of the largest single-family rental companies in the U.S., could win investors over the second time around. That would give a substantial lift to shares of Colony Financial, which has a 25% stake in CAH and is the controlling shareholder.
Richard Saltzman, Colony Financial's CEO, said Tuesday at a conference hosted by Keefe Bruyette & Woods that a CAH spinoff could occur in 2014 and is likely "within the next 12 months, plus or minus."
He added that the unit was structured "as a private REIT that eventually could eventually could go public. There are a lot of different ways to get public. You could do a conventional traditional road show kind of offering. Or you could do spins or potentially consolidation transactions that could kind of get you to the same place so all these options are under consideration."
Though shares of Silver Bay Realty Trust (SBY), a similar business, have fallen 9% over the past year, American Homes for Rent (AMH) another single family rental company, went public in August and has seen shares rise 15.32%.
What's more, Saltzman said during a conference call after Colony cancelled the CAH IPO that the company had originally targeted it for 2014 or 2015, but moved it up "based upon the perception that the market was wide open for this type of offer."