UPDATE 2-Vornado nows sees $710 mln from stock offering
* Prices 17.25 mln shares at $43; underwriters use option
* Stock closes down 3.7 percent lower at $45.27 (Recasts first paragraph with new proceeds estimate)
By Ilaina Jonas
NEW YORK, April 22 (Reuters) - Vornado Realty Trust (VNO.N), owner of office and retail properties, said on Wednesday it now expects to raise net proceeds of $710 million from its equity offering, up from an earlier $617 million, as underwriters exercised their option to purchase additional shares.
The company, the most recent real estate investment trust to tap the equity markets for capital, said it intends to use the proceeds for general corporate purposes, including repaying debt and funding acquisitions.
It said underwriters exercised their option to purchase 2.25 million common shares in addition to the 15 million shares in the follow-on offering, bringing the total to 17.25 million shares priced at $43 per share.
The offering is expected to close on April 27.
Demand for the shares prompted the company to raise its follow-on offering from the 12.5 million shares plus 1.875 million in overallotments that it announced late Tuesday.
Shares of Vornado closed down 3.7 percent at $45.27 on the New York Stock Exchange, paring their losses after going as low as $43.75 earlier in Wednesday's session.
Although the debt markets have been reluctant lately to make large loans to commercial real estate companies, equity investors have shown an appetite for new shares.
Property companies that have turned to the equity market for capital over the past month include Simon Property Group Inc (SPG.N), AMB Property Corp (AMB.N), Kimco Realty Corp (KIM.N) and ProLogis (PLD.N).
Kimco, the largest owner and developer of neighborhood shopping centers, also raised its original follow-on offering earlier this month when demand proved strong.
Vornado, along with Simon and Australia's Westfield Group (WDC.AX), have been mentioned as potential buyers of malls that General Growth Properties Inc (GGWPQ.PK) may sell as a result of its Chapter 11 bankruptcy. (Reporting by Ilaina Jonas; Editing by Tim Dobbyn)
