CTO Realty Growth Announces Commencement of Public Offering of 6.375% Series A Cumulative Redeemable Preferred Stock

Rhea-AI Summary

CTO Realty Growth, Inc. announces a public offering of additional shares of its 6.375% Series A Cumulative Redeemable Preferred Stock. The offering includes 2,978,808 shares of Series A Preferred Stock with a $25.00 per share liquidation preference. The net proceeds will be used for general corporate purposes, property acquisitions, commercial loan opportunities, and debt repayment.

Insights

Financial Analyst

CTO Realty Growth, Inc.'s announcement of a public offering of additional Series A Preferred Stock is a strategic financial move aimed at raising capital. The issuance of preferred stock is a common method for companies to secure funding without increasing their debt levels. The 6.375% dividend rate indicates a potentially attractive yield for investors, especially in a low-interest-rate environment. However, the attractiveness of this yield would depend on the current market conditions and the risk profile of the company.

From an investment perspective, the use of proceeds for general corporate purposes such as property acquisitions and debt repayment suggests a proactive approach to balance sheet management. Repayment of debt can improve financial ratios and potentially lead to a more favorable credit rating. Property acquisitions could signify growth ambitions, which may be viewed positively if the acquisitions are accretive to earnings. However, investors should be aware of the dilutive effect of issuing additional shares, which could impact the value of existing shares.

Market Research Analyst

The real estate market is cyclical and CTO Realty Growth's decision to issue additional preferred stock may reflect its assessment of the current market phase and capital needs. The timing of such an offering can be critical, as it should ideally occur when investor sentiment towards real estate is positive, ensuring sufficient demand for the new shares. The fact that the Series A Preferred Stock will be listed on the NYSE under 'CTO PrA' provides liquidity for investors, which is a significant factor in the attractiveness of such securities.

Market conditions, such as interest rates and real estate trends, will also play a role in the success of the offering. A low-interest-rate environment can make the fixed income from preferred stocks more appealing, while a rising rate environment could have the opposite effect. Additionally, the role of Raymond James & Associates as the book-running manager indicates a level of confidence in the offering, given their expertise in equity offerings.

Legal Expert

The offering is being conducted under an existing shelf registration statement on Form S-3, which allows for a more streamlined process and quicker access to the market. This suggests that CTO has planned for financial flexibility and is executing on that strategy. The legal framework for such offerings requires a prospectus supplement and accompanying prospectus, which provide detailed information about the offering and the company's financials, allowing investors to make informed decisions.

It is also important to note that the press release disclaims the offering as constituting an offer to sell or a solicitation of an offer to buy the securities in any jurisdiction where such an offer or solicitation would be unlawful. This standard legal language is important to comply with the securities laws and avoid regulatory issues. Prospective investors should pay close attention to the terms of the offering and any potential risks outlined in the prospectus supplement.

WINTER PARK, Fla., April 03, 2024 (GLOBE NEWSWIRE) -- CTO Realty Growth, Inc. (NYSE: CTO) (“CTO” or the “Company”) today announced the commencement of a public offering of additional shares of the Company’s 6.375% Series A Cumulative Redeemable Preferred Stock (the “Series A Preferred Stock”) with a $25.00 per share liquidation preference. The additional shares of Series A Preferred Stock constitute an additional issuance of shares of Series A Preferred Stock, with 2,978,808 shares of Series A Preferred Stock currently issued and outstanding (the “Outstanding Series A Preferred Stock”) (which reflects the previous repurchase by the Company of 21,192 shares of Series A Preferred Stock). The Series A Preferred Stock will be treated as a single series with and have the same terms as the Outstanding Series A Preferred Stock.

CTO intends to use the net proceeds from the offering for general corporate and working capital purposes, which may include property acquisitions, commercial loan and investment opportunities and repayment of debt, including amounts outstanding under its credit agreement.

The Outstanding Series A Preferred Stock is, and the Series A Preferred Stock sold in the offering will be, listed on the New York Stock Exchange under the ticker symbol “CTO PrA.”

Raymond James & Associates, Inc. is acting as book-running manager for the offering.

The Series A Preferred Stock will be offered under the Company’s existing shelf registration statement on Form S-3 filed with the Securities and Exchange Commission (“SEC”). The offering will be made only by means of a prospectus supplement and the accompanying prospectus, copies of which may be obtained from Raymond James & Associates, Inc., Attention: Equity Syndicate, 880 Carillon Parkway, St. Petersburg, Florida 33716, by telephone at (800) 248-8863, or by email at prospectus@raymondjames.com.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About CTO Realty Growth, Inc.

CTO Realty Growth, Inc. is a publicly traded real estate investment trust that owns and operates a portfolio of high-quality, retail-based properties located primarily in higher growth markets in the United States. CTO also externally manages and owns a meaningful interest in Alpine Income Property Trust, Inc. (NYSE: PINE), a publicly traded net lease REIT.

Safe Harbor

Certain statements contained in this press release (other than statements of historical fact) are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements can typically be identified by words such as “believe,” “estimate,” “expect,” “intend,” “anticipate,” “will,” “could,” “may,” “should,” “plan,” “potential,” “predict,” “forecast,” “project,” and similar expressions, as well as variations or negatives of these words. Examples of forward-looking statements in this press release include, without limitation, statements regarding the proposed offering of the Series A Preferred Stock, the expected use of the net proceeds from the offering, the listing of the shares of Series A Preferred Stock sold in this offering on the New York Stock Exchange and the Company’s expectations concerning market conditions for an offering of the Series A Preferred Stock.

Although forward-looking statements are made based upon management’s present expectations and reasonable beliefs concerning future developments and their potential effect upon the Company, a number of factors could cause the Company’s actual results to differ materially from those set forth in the forward-looking statements. No assurance can be given that the offering discussed above will be consummated, or that the net proceeds of the offering will be used as indicated. Consummation of the offering and the application of the net proceeds of the offering are subject to numerous possible events, factors and conditions, many of which are beyond the control of the Company and not all of which are known to it, including, without limitation, market conditions and those described under the heading “Risk Factors” in the prospectus supplement relating to the offering and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, which can be accessed at the SEC’s website at www.sec.gov.

There can be no assurance that future developments will be in accordance with management’s expectations or that the effect of future developments on the Company will be those anticipated by management. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company undertakes no obligation to update the information contained in this press release to reflect subsequently occurring events or circumstances.

Contact:	Lisa M. Vorakoun Vice President, Chief Accounting Officer and Interim Chief Financial Officer and Treasurer (386) 274-2202 lvorakoun@ctoreit.com

FAQ

What is CTO Realty Growth, Inc. announcing?

CTO Realty Growth, Inc. is announcing a public offering of additional shares of its 6.375% Series A Cumulative Redeemable Preferred Stock.

How many shares of Series A Preferred Stock are included in the offering?

The offering includes 2,978,808 shares of Series A Preferred Stock.

What is the liquidation preference per share for the Series A Preferred Stock?

The liquidation preference per share for the Series A Preferred Stock is $25.00.

How will CTO Realty Growth, Inc. use the net proceeds from the offering?

CTO intends to use the net proceeds for general corporate and working capital purposes, property acquisitions, commercial loan opportunities, and debt repayment.

Which stock exchange will the Series A Preferred Stock be listed on?

The Series A Preferred Stock will be listed on the New York Stock Exchange under the ticker symbol 'CTO PrA.'