Summary

• Nordic region offers AAA rating and is expected to see strong GDP growth.
• Dividend yield will be around 6% depending on where shares price.
• Portfolio of properties is largely tilted to government related tenants.

Real estate investment trusts, or REITs as they’re commonly referred to, have been around for awhile on the open market. The companies own real estate and then pay out 90% of income to shareholders to qualify for this delegation. In a market where every company, whether it’s restaurants, casinos, or phone companies, is applying for REIT status, a new international gem is hitting the open market via an IPO this week. Polar Star Realty Trust (BATS:PSRT ) offers exposure to the Nordic region (Norway, Sweden, and Denmark) with a stellar portfolio of investment grade customers.

Polar Star will offer 43,478,261 shares at a price range of $10 to $13 this week. The company has 26 properties in its portfolio, with 11 location in Norway and 15 in Sweden. The company owns, leases, manages, and redevelops property for office, industrial, and commercial clients. Currently, the focus is on office (12 properties), and industrial (12 properties).

From the filing, the company believes the following are its strengths:

· Strategically located portfolio

· Primary investment focus on Nordic government and high credit quality corporate tenants

· Strong and stable target markets

· Favorable lease renewal and re-tenanting experience

· Experienced senior management team with broad capabilities, strong relationships with government agencies

· Broad industry contracts to drive acquisition opportunities

· Scalability of platform

The company’s growth strategy is as follows:

· Capitalize on acquisition opportunities in the Nordic market

· Realize internal growth through active asset management

· Maintain relationships with high quality tenants

· Seek opportunities based on industry relationships deal flow

· Capitalize on opportunities to generate additional cash flow from our properties

Here are some of the statistics from the portfolio:

· 7.2 million leasable square feet

· 94.6% leased (as of 9/30)

· Average of 5.8 years remaining for tenants

· 232 total tenants for 105 buildings

· 5 properties with more than 500,000 square feet

Polar Star currently gets a total of $106.7 million in annual rent, with 71.8% of the total coming from Sweden and 28.2% coming from Norway. The company’s largest property is The Garrison with annual rent of $15.0 million for an 835,925 square feet property.

The key to this investment is the strength of the Nordic region. The three countries (Norway, Sweden, Denmark) are three of only nine in the world to have a AAA rating from all three leading credit rating agencies. The two key countries in the portfolio, Norway and Sweden, also have GDP forecasts that exceed the Eurozone market.