NEW YORK (TheStreet) -- Select Income REIT (SIR) shares dropped -5.4% to $26.37 on Tuesday after the real estate investment trust announced that it was spending $2.7 billion in cash and stock options to buy REIT Cole Corporate Income Trust.
The deal expands the company's presence to 35 states from 21 states, while adding 64 office and industrial properties to the company's portfolio.
The deal in total is worth $3 billion and is expected to close in the first quarter of the next fiscal year.
TheStreet Ratings team rates SELECT INCOME REIT as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate SELECT INCOME REIT (SIR) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and feeble growth in the company's earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows: