Office Investor Joss Realty Launches Initial Public Offering

Larry Botel’s Joss Realty launched its initial public offering this week, several months after filing for an IPO.

The office property owner and investor launched the offering with 3 million shares up for grabs, Bisnow reported. The price for shares of the real estate investment trust is expected to range from $4 to $6. The underwriters of the offering are expected to receive a 45-day option to buy up to an additional 450,000 shares of the common stock, according to a release on the IPO initiation.

Joss is launching with a relatively small portfolio, which could lead to concentrated risk for investors. The firm holds interests in three office buildings, spanning 308,000 square feet. Its interest in the Boston and Philadelphia properties is 100 percent, and it has a 27 percent interest in the Bay Area building.

Across the portfolio, there are 33 tenants which have a weighted average remaining lease term of slightly less than 5 years. The portfolio is 72 percent occupied on average, but the spectrum ranges from 92 percent all the way down to 47 percent.

The firm is expected to look for more value-add opportunities in the market where it dabbles, as well as in other major metropolitan areas, including New York, Los Angeles and South Florida, according to a Securities and Exchange Commission filing. It will trade on the New York Stock Exchange and likely qualify as an REIT for federal tax purposes this year.

Launched in 2005, Joss’ portfolio now spans more than 3.4 million square feet and is valued at more than $1.2 billion.

Office REITs are coming off a challenging year on the stock market, even as allocations shift towards the property type. Publicly-listed equity office REITs finished second-last in return performance among 13 REIT sectors tracked in the FTSE Nareit All Equity Index, losing 14 percent of its total return.— Holden Walter-Warner