Dec. 14 (Bloomberg) -- Silver Bay Realty Trust Corp., a real estate company that buys and manages single-family rental homes, slipped 1.4 percent after raising $245 million in an initial public offering.
The Minnetonka, Minnesota-based company and shareholders sold 13.25 million shares for $18.50 each, according to data compiled by Bloomberg, after offering them for $18 to $20. The stock dropped to $18.24 at the close of New York trading.
Silver Bay went public as investment firms pour money into single-family properties, coinciding with an almost 30 percent drop in home prices from a July 2006 peak. At the same time, there is growing rental demand from homeowners who lost property to foreclosure and are unable to buy, said Ray Huang, an analyst with Green Street Advisors Inc.
“Having the ability to go public and access the public markets, including the debt market down the road, will help companies grow,” Huang said in a telephone interview from his office in Newport Beach, California.
Led by Chief Executive Officer David Miller, a former U.S. Treasury Department official and Goldman Sachs Group Inc. executive, Silver Bay was formed by Two Harbors Investment Corp. to buy, renovate, lease and manage single-family properties. It will be the largest public real estate investment trust concentrating on single-family homes.
Credit Suisse Group AG, Bank of America Corp. and JPMorgan Chase & Co. led the offering. The shares are listed on the New York Stock Exchange under the symbol SBY.
Silver Bay will use the proceeds from the IPO to acquire more than 3,100 single-family properties, according to regulatory filings. Silver Bay’s portfolio consists of 2,540 single-family properties in Arizona, California, Florida, Georgia, Nevada, North Carolina and Texas.
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