Colony Financial Inc., a newly formed real estate investment trust, said late Wednesday that it raised $255 million in an initial public offering.

The company, a subsidiary of Tom Barrack’s Century City investment firm Colony Capital LLC, intends to acquire, originate and manage commercial real estate debt. Shares will begin trading Thursday on the New York Stock Exchange under the symbol CLNY.

The offering, which priced 12.5 million shares at $20 each along with a concurrent private placement, was a disappointment for a company that had originally planned to raise as much as $500 million. In a filing Tuesday with the Securities and Exchange Commission, Colony cut its expected offering in half, from 25 million shares to 12.5 million.

Colony’s is the second local IPO of 2009. In late July, PennyMac Mortgage Investment Trust, a Calabasas-based REIT started by former Countrywide executives, raised more than $300 million. Like Colony, PennyMac was forced to reduce the size of its IPO as investor interest in its stock cooled.

Mortgage REITs have led the charge in recent weeks as the U.S. IPO market has come back to life. Besides Colony, at least two other REIT IPOs are expected to price this week.