40 North Management Reduces Stake in Mattress Firm Holding Corp. (MFRM), But Buys More Shares of Columbia Property Trust Inc. (CXP)

Let’s turn our attention to 40 North’s other holding, Columbia Property Trust Inc. (NYSE:CXP). At the beginning of August, Standard & Poor upgraded the real estate investment trust’s senior unsecured debt and issuer ratings to BBB from BBB-, indicating Columbia’s higher quality asset profile. As a result, Columbia Property Trust is set to benefit from lower borrowing costs on its unsecured bank debt and other unsecured bond offerings the company might pursue in the years ahead. Furthermore, the company recently completed the acquisition of the 481,110-square-foot Class-A office portion of the historic New York Times Building located in the Times Square submarket of Manhattan for $516 million. This purchase is believed to be a great addition to the company’s asset portfolio, and will serve as a flourishing and stable cash stream for Columbia Property Trust. Nevertheless, it seems that the high expectations that the U.S. central bank will begin raising short-term interest rates in September and the endless talks around this rate hike might have had an impact on the company’s stock. History provides evidence that equity REITs tend to perform worse in rising rate environments, which might explain the decline of Columbia’s stock in 2015. The shares of the REIT have lost almost 16% year-to-date and might go even lower should the Fed raise interest rates this month or this year. David E. Shaw‘s D.E. Show & Co., is the second-largest shareholder of Columbia Property Trust Inc. (NYSE:CXP) within our database, holding 1.48 million shares.

Disclosure: None