FrontView REIT, Inc. elicited significant investor attention last week after it revealed plans to enter the stock market. After a vibrant first half, the IPO market looks poised to maintain its momentum for the remainder of the year. A general improvement in economic conditions and the recent interest rate cut have set the right backdrop for an increase in IPO activity.
The Offering
FrontView is the second major real estate investment trust seeking to become a publicly traded business this year, with the first being Lineage, Inc. which went public in July. In a statement filed with the Securities and Exchange Commission, the Texas-based company said it would offer around 13.2 million common shares in the initial public offering. The offer price is in the range of $17.0 per share to $21.0 per share – at the midpoint of the price range, the IPO will generate proceeds of approximately $250 million.
Morgan Stanley, JP Morgan, Wells Fargo Securities, and BofA Securities are the lead bookrunners. The stock has been conditionally approved for listing on the New York Stock Exchange under the ticker symbol FVR. The FrontView leadership intends to use proceeds from the offering to acquire shares of the operating partnership to which the company will become the sole general partner. Ultimately, the fund will be used to repay debt and for general business and working capital purposes including future acquisitions.
Key Numbers
In the six months that ended June 30, 2024, the company generated total rental revenues of $29.9 million and incurred a net loss of $4.6 million. Funds from operations, a financial metric widely used for measuring cash flows generated by real estate investment trusts, was $7.6 million during the first half.
FrontView is a real estate investment trust engaged in the acquisition, ownership, and management of outparcel properties which are net leased to various tenants. As of June 30, 2024, the company had a well-diversified portfolio of 278 outparcel properties with direct frontage in 31 US states. Its tenants include service-oriented businesses like restaurants, cellular stores, financial institutions, automotive stores, medical providers, and pharmacies. FrontView was founded by Stephen Preston in 2016.