Manulife US REIT (MUST) marked its foray into the high-growth Sun Belt states in November 2021 by announcing three acquisitions across Arizona and Oregon.
The REIT, which previously had an investment portfolio of only Grade A office and Trophy class assets, effectively diversified its portfolio with business park assets given the acquisitions that cost USD208 million collectively.
The assets acquired are namely Diablo Technology Park, a Grade A office campus known as Park Place, and a three-building office campus known as Tanasbourne Commerce Center.
To partially fund the acquisitions, MUST conducted an equity fund raising exercise, which comprised of a private placement for institutional and accredited investors that raised approximately USD100 million after the upsize option was exercised.
The placement was eventually priced at USD0.649, a discount of 8.9% to the volume weighted average price (VWAP) and 5.9% to the adjusted VWAP.
This led to perceptions among some investors that the REIT was not acting in an inclusive manner to its retail unitholders, especially given the transformational nature of the acquisition.
And in the wake of the fundraising exercise, units of MUST fell from its pre-acquisition price of USD0.71 to around its adjusted VWAP of USD0.6898 on a high volume of off-market transactions in the next day.
In response to questions from REITsWeek, Caroline Fong, MUST’s Chief Investor Relations & Capital Markets Officer, explained that the REIT did not “neglect” its retail investors for the acquisitions.
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