Market reaction and offering overview
Netstreit Inc. stock gained 1.35% on Thursday after the company priced an upsized follow-on offering with aggregate proceeds approximating $209 million. The Dallas, Texas-based real estate investment trust said late Wednesday that it priced 10.98 million shares at $19.00 per share, a placement that the company noted represents about a 1.3% discount to the stock's most recent closing price.
Size change and mechanics
The offering was increased from an initial plan to sell 8.75 million shares. Netstreit also entered into one-year forward sale agreements with the bookrunners, Wells Fargo and Bank of America. Under the forward sale structure, the REIT locks in the current price for the shares while deferring both the actual issuance of the new shares and the receipt of cash until a later settlement date, an arrangement intended to avoid immediate dilution to existing holders.
Use of proceeds
Netstreit said that once the forward sale agreements settle, it plans to deploy the net proceeds for general corporate purposes. The company specifically listed debt repayment, property acquisitions, and development activities as intended uses of funds.
Analyst commentary and alternative sizing
Stifel analysts noted the upscale in the forward equity plan and provided an alternative sizing scenario in their commentary: "Prices Up-Sized Forward Equity Offering. Last night, NTST priced a 12.63 million, assuming the shoe is exercised, share offering at $19.00 for gross proceeds of $240 million. 2026 Guidance Could Be Raised Later This Year," Stifel analysts wrote.
Trading level and market tone
The market interpreted the capital raise and structure favorably, with shares trading at $19.56 during Thursday's session. The modest uptick in the stock price indicates investor support for the company’s approach to preserving optionality while securing access to equity financing.
Summary of facts
- Netstreit priced 10.98 million shares at $19.00 per share, for an offering of approximately $209 million.
- The offering size was increased from an originally planned 8.75 million shares.
- The company entered into one-year forward sale agreements with Wells Fargo and Bank of America to delay issuance and proceeds until settlement.
- Planned use of net proceeds includes debt repayment, property acquisitions, and development activities.
- Stifel noted a potential 12.63 million share outcome, assuming the shoe is exercised, at $19.00 for gross proceeds of $240 million.