Sarasota Company Offering Shares In REIT

By John Hielscher
Staff Writer

SARASOTA – A Sarasota-based company says it wants to raise up to $30 million to acquire and manage properties leased to federal government agencies.

HC Government Realty Trust Inc. has been cleared by the Securities and Exchange Commission to offer up to 3 million shares, priced at $10 each, in a real estate investment trust.

The company, which now owns three office properties leased through the U.S. General Services Administration, said it intends to acquire seven other properties owned by Holmwood Capital LLC, its privately held predecessor company.

“Backed by the full faith and credit obligation of the U.S. government, we believe that GSA properties could present REIT investors with compelling risk-adjusted returns due to the superior credit of the tenant, significantly reduced default risk and high lease renewal rates for the properties in our target profile,” Edwin M. Stanton, CEO of HC Government, said in a news release. “There is a large, untapped market, and we intend to capitalize on it by acquiring government leased assets, which

“There is a large, untapped market, and we intend to capitalize on it by acquiring government-leased assets, which should, in turn, generate consistent returns for shareholders,” Stanton said.

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.

 The company plans to target 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.

Florida properties in its portfolio include a U.S. Customs and Border Patrol office in Cape Canaveral and a DEA site in Port St. Lucie.

Holmwood Capital was founded in 2010 by Stanton and real estate and securities attorneys Bob and Rob Kaplan. HC Government, formed earlier this year, says its target acquisitions are buildings with 5,000 to 50,000 rentable square feet.

The company said it will apply to list the REIT stock on the OTCQX Marketplace. Orchard Securities LLC is the dealer-manager for the offering.

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