Gordon DuGan, CEO of Gramercy Property Trust (NYSE: GPT), joined REIT.com for a CEO Spotlight video interview at REITWorld 2014: NAREIT’s Annual Convention for All Things REIT at the Atlanta Marriott Marquis.
Gramercy has made acquisitions in both the office and industrial sectors in 2014. DuGan said both sectors are healthy thanks in part to a dearth of new construction. The company is finding “terrific” assets on the market in the range of $5 million to $30 million.
“The dynamics of the market are very good,” he said. “We really like where the market is right now.”
DuGan said Gramercy is focusing on major metropolitan markets: “These are good markets, and they’re coming back very nicely.”
With regard to the company’s capitalization structure, since the summer of 2012, the firm has raised more than $300 million in common equity and roughly $100 million in preferred equity capital. The company also has created a $400 million unsecured credit facility. Gramercy is currently holding an at-the-market (ATM) equity offering.
“We’ve been very active in the capital markets,” DuGan said. “The ATM is just another tool for us.”
Gramercy is using the ATM offering to raise capital in small bundles to fund one-off acquisitions.
“With those types of assets, it really marries up very well, so you don’t have to increase your leverage,” DuGan said. “You can just raise stock in small junks, but it fits perfectly with the things we’re doing.”
For larger deals, the company will continue to do “normal” stock offerings, according to DuGan.
Looking back at 2014, DuGan noted that the company had stayed on the course that it set at the beginning of the year. Gramercy’s objectives included buying roughly $600 million in new assets, which represented a doubling of the firm’s asset base, and raising approximately $300 million in common equity.
“People thought that was a really tall order,” he said. “But our stock has gone up this year, and we’ve done all those things.”
Heading into 2015, the challenges facing Gramercy are “much more manageable,” according to DuGan.
“I think the opportunities greatly outweigh the challenges,” DuGan said.