Senior Living: Health Care REIT, CommonWealth REIT To Sell Shares; Stocks Down

By Joan E. Solsman for Dow Jones Newswires

Two real-estate investment trusts announced stock offerings Monday.

Shares in both CommonWealth REIT (CWH) and Health Care REIT Inc. (HCN) were down in after hours trading on the news. Respectively, they fell 4.5% to $26.75 and 4.1% to $46.45. Both stocks had climbed slightly more than the broader market so far this year through the close.

CommonWealth REIT, which used to be known as HRPT Properties Trust until July, said it would sell 5 million common shares, which would raise shares outstanding about 7.7%. It plans to use proceeds to reduce debt and buy back Series B preferred shares.

The REIT, which focuses on commercial real estate and owns more than 210 office properties, has been posting lower profits recently as rental revenue, which grew during the recession, began to decline about a year ago.

Health Care REIT, which invests in assisted-living and skilled-nursing facilities, said for its part, it would offer 7 million shares, representing a 5.6% boost to is shares outstanding. It said it would use the capital for such things as investing in properties and also repaying debt.

The company’s profit fell in its most recent quarterly results posted in August because of higher interest expenses, though its funds from operations–a key metric for REITs–were better than expected. It also was optimistic about the senior-housing market’s future.

Health care REIT has reported fairly stable revenue as occupancy in medical offices and assisted living facilities stood up during the recession.

[wsj.com]

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