The Real Deal Miami

Two distressed mortgage REITs halve IPOs

September 24, 2009 10:58AM

Two mortgage real estate investment trusts, Colony Financial and Apollo Commercial, halved their initial public offerings yesterday, causing concern over soon-to-be-announced IPOs in the sector. Colony said that it would sell just 12.5 million shares, instead of the 25 million planned, while Apollo said it would sell 10 million, as opposed to 20 million. American Realty Capital CEO Nicholas Schorsch said that the market may be burdened with an overabundance of distressed mortgage REITs, like Colony and Apollo, creating weak demand. “People are assuming the market is unlimited, but institutions don’t want to be overweighted in the sector,” Schorsch said. “The market doesn’t have the capacity to absorb this many deals.”