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Sarasota REIT raises first $3.2 million
SARASOTA — A local company said Tuesday that it has raised $3.2 million of an offering of up to $30 million to acquire and manage properties leased to federal government agencies.
HC Government Realty Trust Inc. was cleared by the U.S. Securities and Exchange Commission in November to offer up to 3 million shares, priced at $10 each, in a real estate investment trust.
The company said it sold approximately 318,000 shares of its common stock to individual investors. The firm needed to sell 300,000 shares to break impound and put investor dollars to work.
The company said it plans to purchase seven additional properties from its predecessor, Hollywood Capital LLC. Its holdings now include 11 single-tenant properties leased by the federal government through the U.S General Services Administration.
The REIT will target an initial annual dividend of 5.5 percent, or 55 cents per share. After completing the capital raise, the company said it intends to apply to list its common stock on the OTCQX Marketplace.
“We are pleased to have quickly completed our initial capital raise, a critical first step in our long-term plan to build the HC Government Realty Trust portfolio,” director and CEO Edwin M. Stanton said in a news release. “With a dedicated focus on building a portfolio of smaller, regional-based GSA properties, we are seeking to provide investors with an attractive high-yield real estate investment vehicle, one that delivers reduced risk as a result of our government-leased assets backed by the full faith and credit obligation of the United States.”
The company plans to purchase buildings whose tenants include some of the federal government’s largest agencies. Its current and future portfolio includes properties leased to the Drug Enforcement Administration, the FBI, the Social Security Administration and the Department of Transportation.
REITs are publicly traded companies formed to manage real estate. They typically pay out all of their taxable income as dividends to shareholders and shareholders pay the income taxes on those dividends.