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This Real Estate Company Just Launched Its Second SPAC. Should You Invest?

By Matthew Frankel, CFP® - Mar 16, 2021 at 7:33AM

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After its first SPAC recently announced its target, this major real estate firm is going to try to repeat the process.

Real estate firm Tishman Speyer recently announced that its first blank-check company, TS Innovation Acquisition (TSIA), plans to take property technology company Latch public. 

However, it doesn't appear that Tishman Speyer is satisfied with just one successful special-purpose acquisition company IPO. The firm recently completed an IPO for its second SPAC, Tishman Speyer Innovation II (TSIB.U -0.47%). In this Fool Live video clip, recorded on March 8, contributor Matt Frankel, CFP, and Industry Focus host Jason Moser talk about why this could be a SPAC to watch. 

Jason Moser: Let's kick off the conversation with the first one here, Tishman Speyer Innovation II Corp. Ticker is TSIBU. Walk me through what has you so interested in Tishman Speyer Innovation II?

Matt Frankel: Well, if you like Latch, this could be a SPAC for you, because it's kind of the sequel. This is the second SPAC from Tishman Speyer. This was originally supposed to be $250 million raise, they ended up having to up-size the 300 million for demand. That was pretty impressive. Tishman Speyer, if you're not familiar, they are a New York-based real estate development fund. They build, they manage, they develop real estate. To name one of their big New York City properties, little one, then I don't know if anyone's heard of called Rockefeller Center. 

Moser: [laughs] I've heard of it.

Frankel: Yeah, that's one on their list. They have some big properties in Paris, in Shanghai, developing a big new complex in San Francisco right now. They're a big deal on real estate, just to put it mildly. They have about $56 billion worth of properties under management, over 82 million square feet in some of the most expensive cities in the world. That's a pretty big portfolio. Their CEO, Rob Speyer, that's who Luke was talking about, he's known for a long time, is the CEO of this SPAC as well. Like most SPACs, they're very vague on what they're targeting, but they are targeting what's called a proptech investment, which is what Latch is, which shortly is short for property technology. If you think they did a good job finding a company like Latch to take public, and think they're going to do it again, right now you can get the second version of their SPAC, for just over the $10 net asset value. Right before we were talking, it's trading for 10.25 a unit, which includes our common share plus that 1/5 of a warrant. You're actually getting the common share for a little bit less than $10, which is really nice.

Moser: Yeah.

Frankel: If you think they're going to repeat their progress with Latch, there are a lot of proptech companies that could make good candidates. It's a way to get in cheaply on a bet on management. The ticker symbol for this one is TSIBU. If you remember the units for the first one, the one that's taking Latch public, were TSIAU, so that was SPAC A, this is SPAC B. But the official maintenance Tishman Speyer Innovation Corporation II.

Moser: Do you have any timeline? Do you have any idea? I mean, I know Latch, obviously, Luke was clear on the timeline there. Do you have an idea of a timeline for this particular launch, this second version?

Frankel: Well, it's worth mentioning this one just launched in February.

Moser: Oh, I mean, I guess not launched. Maybe that's the wrong word, the target that they might be looking for.

Frankel: Sure. The IPO happened in February. This one is actually only trading as units.

Moser: Right.

Frankel: SPACs don't split off into common shares and warrants trading separately, for 52 days after the IPO. Don't ask me why it's 52 days, it just is. But so, the point being to answer Jason's questions, since they just wanted in public in February, they have a two-year time horizon to find an acquisition target. Most SPACs don't take anything close to the full two years. Lately, it's been three, four, sometimes six months to find an acquisition target from these big name SPACs like Tishman Speyer is. But it could take up to two years. SPACs are great investments for people who are patient and really believe in certain managers. I guess at this one you can get into just over that $10 IPO price. Still it's not trading at a premium. I mean, the tech correction in the past couple of weeks has also hit the SPAC market pretty good.

Moser: Yeah.

Frankel: Which is good if you're looking to get into some of these SPACs that don't have deals yet. Because you're getting them for a lot closer to their net asset value than you would have a week or two ago. It could be a good time to think of some of these, even though they don't know what company you are buying yet, their managers have a good track record, so I'm going for it.

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Stocks Mentioned

Tishman Speyer Innovation Corp. II Stock Quote
Tishman Speyer Innovation Corp. II
$9.77 (-0.47%) $0.05
TS Innovation Acquisitions Corp. Stock Quote
TS Innovation Acquisitions Corp.

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