BTR Realty Inc. of Linthicum unveiled a long-awaited plan yesterday to convert the company from a corporation to a real estate investment trust, as part of a plan to raise up to $100 million to lower the debt load on BTR.
The company, which struggled during the recent recession, said it plans to form a real estate investment trust called Mid-Atlantic Realty Trust, which will sell between $60 million and $100 million worth of stock and convertible debt.
The newly formed trust will then merge with BTR, according to BTR President F. Patrick Hughes. The plan, which must be approved by BTR shareholders, calls for owners of BTR stock to receive shares in the trust. BTR executives would run the trust.
BTR Realty owns and manages 2.79 million square feet of shopping centers, office and industrial buildings and other income-producing properties in Maryland, Virginia, North Carolina, Florida, Illinois, Arizona, Texas and New York.
Much of the proceeds from the BTR, Mid-Atlantic Realty offering would be lent to BTR to reduce its $145 million in debt, Mr. Hughes said. The company would also pay a special cash dividend of less than $5 million to shareholders before the merger.
The company has more than 8 million shares outstanding.
The company has been studying the idea of converting to REIT status for six years, Mr. Hughes said, and acknowledged in 1991 that it wanted to make the move. The plan was delayed partly because of the difficulty of raising the money for the special dividend, which was estimated at $10 million two years ago. Mr. Hughes said the payout shrank because BTR has been losing money.