Workspace Property Trust exploring raising fresh capital

New York

WORKSPACE Property Trust, an office and industrial landlord that abandoned an effort to go public in 2018, is exploring raising fresh capital, according to people with knowledge of the matter.

The Horsham, Pennsylvania-based company, led by chief executive officer Tom Rizk and chief operating officer Roger Thomas, has tapped advisers to solicit interest from potential institutional investors including real estate private equity firms, sovereign wealth funds and insurance companies, said the people. The new capital may come in the format of preferred equity, one of the people said.

Fresh funding will be used to return capital to existing equity investors and to bolster Workspace's balance sheet for future growth, including for acquisitions, said some of the people.

Occupancy across the company's portfolio is about 90 per cent and rental collection, which hasn't suffered during the pandemic, exceeds 98 per cent, said one of the people. A representative for Workspace declined to comment.

Uncertainty has been pervasive in the US office sector, with the pandemic spurring occupancy losses, subduing new leasing activity and contributing to a total vacancy rate of 17.1 per cent, JLL said in a report last week. Still, vaccines are fuelling optimism that tenants may soon have a clearer picture of their real estate needs, the brokerage firm said.

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Workspace filed to go public in 2017, before withdrawing paperwork the following year. The company owns 148 properties comprising 10 million square feet across states including Arizona, Minnesota and Florida, according to its website.

Its investors include Mr Rizk, who was the former CEO of Mack-Cali Realty Corp; Mr Thomas; and Safanad Inc, according to securities filings. BLOOMBERG