8-K: CTO Realty Growth Announces At-the-Market Offering of Preferred Stock

CTO Realty Growth has entered into agreements to potentially sell up to $24.5 million of its 6.375% Series A Cumulative Redeemable Preferred Stock through an at-the-market offering program.

Summary

• CTO Realty Growth, Inc. has established an at-the-market offering program.
• The company may sell up to $24.5 million of its 6.375% Series A Cumulative Redeemable Preferred Stock.
• The sales will be conducted through multiple sales agents, including BMO Capital Markets Corp., B. Riley Securities, Inc., and others.
• The shares may be sold through ordinary broker transactions on the New York Stock Exchange, to market makers, or at negotiated prices.
• Each sales agent will receive a commission not exceeding 2.0% of the gross sales price.
• The offering is made under a prospectus supplement dated August 23, 2024, and a base prospectus dated October 26, 2022.

Sentiment

Score: 6

Explanation: The document is neutral to slightly positive. It details a standard financial transaction, which is neither particularly good nor bad. The company is raising capital, which is generally a positive sign, but the offering could also dilute existing shareholders.

Positives

• The at-the-market offering provides a flexible way for CTO Realty Growth to raise capital.
• The involvement of multiple sales agents could lead to broader distribution of the preferred stock.
• The offering is structured to allow for sales at prevailing market prices, potentially maximizing proceeds.

Negatives

• The offering could potentially dilute existing shareholders if the preferred stock is converted to common stock.
• The company will incur commissions of up to 2.0% on the gross sales price, reducing the net proceeds.

Risks

• There is no guarantee that the company will be able to sell the full $24.5 million of preferred stock.
• Market conditions could impact the price at which the shares are sold.
• The company's stock price could be negatively affected by the offering.

Future Outlook

The company intends to use the proceeds from the offering for general corporate purposes, but specific details are not provided in this document.

Industry Context

At-the-market offerings are a common method for REITs to raise capital, providing flexibility and potentially minimizing market impact compared to traditional underwritten offerings. This allows the company to take advantage of market conditions to raise capital as needed.

Comparison to Industry Standards

• The use of an at-the-market offering is a standard practice for REITs seeking to raise capital.
• The commission rate of up to 2.0% is within the typical range for such offerings.
• Other REITs, such as those with similar market capitalizations, often use similar methods to raise capital.
• Companies like AGNC Investment Corp. and Annaly Capital Management also use at-the-market offerings to manage their capital structure.

Stakeholder Impact

• Shareholders may experience dilution if the preferred stock is converted to common stock.
• The company will have additional capital to fund its operations and growth.
• The offering could potentially increase the company's visibility in the market.

Next Steps

• The company will proceed with the at-the-market offering, selling shares as market conditions allow.
• The company will file necessary reports with the SEC regarding the sales of the preferred stock.
• The company will use the net proceeds for general corporate purposes.

Key Dates

Keywords

at-the-market offering, preferred stock, equity distribution, capital raise, CTO Realty Growth, Series A Preferred Stock, real estate investment trust, REIT