In its second big real estate bet in two weeks, Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway Inc. (BRK.A, Financial) (BRK.B, Financial) took a 9.8% ownership stake in STORE Capital Corp. (STOR, Financial) on June 26.
The real estate investment trust disclosed the conglomerate invested $377 million in the company, paying $20.25 per share for 18.6 million shares.
The purchase follows Buffett’s $302 million investment in Canada’s Home Capital Group Inc. (TSX:HCG, Financial) last week.
After the announcement, Store Capital shares climbed 10% to $22.83.
With a real estate portfolio of 1,750 properties, Arizona-based Store Capital invests largely in single-tenant properties. According to the company’s website, among its largest investments are chain restaurants, preschools, fitness centers, furniture stores and movie theaters, providing it with some insulation from the declining traditional retail space.
One of the REIT’s customers, outdoor retailer Gander Mountain Co., filed for bankruptcy in March, causing the stock to dip briefly. Additionally, Store shares fell after it reported disappointing earnings in May.
Despite these minor setbacks, Store Capital President and CEO Christopher Volk said Buffett’s investment sets the company up for continued growth and adds to its strong financial position.
“An investment in our company from one of history’s most admired investors represents a vote of confidence in our experienced leadership team and an affirmation of our profit-center real estate investment and management approach,” Volk said.
With its investment, Berkshire Hathaway is now Store Capital’s third-largest shareholder behind the Vanguard Group Inc. and FMR LLC. Other gurus who own the stock include Steven Cohen (Trades, Portfolio), Manning & Napier Advisors Inc. and Paul Tudor Jones (Trades, Portfolio).
Disclosure: I do not own any stocks mentioned in the article.
