MS Morgan Stanley

A real-estate investment trust raised $1.05 billion in its initial public offering Tuesday, according to people familiar with the deal, the latest sign that the IPO market could be starting to thaw.

MGM Growth Properties LLC, which invests in properties such as casino resorts, priced its offering at $21 a share—the high end of its target range—according to people familiar with the deal. It sold 50 million shares, the people said.

The company had planned to sell 50 million shares between $18 and $21 apiece, according to regulatory filings. Its stock is set to begin trading on the New York Stock Exchange under the symbol "MGP" on Wednesday.

It is the first offering by a U.S.-listed company to raise more than $1 billion since First Data Corp. raised $2.8 billion in October, according to Dealogic.

The REIT is being spun out of hotel operator MGM Resorts International, and the REIT will include 10 MGM properties, including resorts in Las Vegas, according to a regulatory filing. MGM Resorts will remain a majority owner after the IPO.

MGM Growth Properties is one of a trio of companies expected to make their stock-market debuts this week, after Bats Global Markets Inc.'s success during a slump in new offerings.

Bats's IPO last week followed the slowest quarter for U.S. IPOs since 2009. Shares of Bats rallied in their first day of trading Friday, ending 21% higher.

Analysts say they want to see a steady flow of deals that price within or above expectations and go on to trade higher than their opening price before confidence in the IPO market is restored.

"I don't think one IPO will do it," said Daniel Klausner, managing director in PwC's capital-markets advisory business, who added that he has some clients who tell him they want to see a quarter or two of stability in the IPO market before they will launch their offerings. "The market needs momentum."

Also set for later this week is the offering of dialysis-services provider American Renal Associates Holdings Inc. and cybersecurity company SecureWorks Corp., the first technology-company IPO since December, people familiar with the offerings said.

"As a group they need to trade reasonably well," said JD Moriarty, head of Americas equity capital markets at Bank of America Merrill Lynch. "Investors certainly need to look back at the IPO asset class and say, 'you know what, there's a reward for participating in this.'"

Before Bats, the previous 10 offerings of the year were either for small biotechnology companies or blank-check, or shell, companies, which typically use IPO proceeds to acquire assets and aren't viewed as a measure of investor appetite for risk.

The average first-day performance for newly public companies was a negative 0.1% prior to Bats, according to Dealogic. No IPOs this year have priced above their expected range.

However, the equity-capital market environment has improved in recent weeks.

Volatility in the overall stock market has calmed down in the past month and a half and markets have rallied broadly.

One indicator for money-manager appetite for risk and, by extension, IPOs, is the performance of stock sales by already-public companies. By some measures that has improved since the market hit its 2016 low on Feb 11. Between the start of the year and Feb. 11, 40 deals raised about $14 billion, according to data from Dealogic. Since then, through Tuesday, 93 offerings have raised about $29 billion.

Bank of America Merrill Lynch is leading all three deals this week. Morgan Stanley led the Bats IPO.

Write to Corrie Driebusch at corrie.driebusch@wsj.com

(END) Dow Jones Newswires

April 19, 2016 17:45 ET (21:45 GMT)

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