Combined Specialist Will Have Business Value of $5.7 Billion, Creating Larger, More Diversified Portfolio with Increased Financial Strength
After choosing to do so, it took only 3 weeks for Chambers Street Residences, the $3.3 billion real estate effort trust previously called CB Richard Ellis Realty Trust, to pick new strategic choice. The Princeton, New Jersey-based REIT has consented to combine with Gramercy Characteristic Trust Inc. producing the largest industrial and workplace net lease realty effort trust with an anticipated business value of $5.7 billion.
Upon closing, Chambers Street shareholders will certainly own 56 % and Gramercy investors will certainly own approximately 44 % of the combined company.
The mix combines two complementary profiles focused on commercial and office property, making up 288 real properties and 52 million square feet in significant markets throughout the united state and Europe.
The combined specialist is expected to have larger size and scale, more comprehensive renter diversity, increased financial flexibility, and a more reliable operating platform to drive growth.
The mix likewise is expected to improve its ability to pursue larger chances, improve future revenues predictability and enhance its flexibility to recycle capital gradually.
Following the close of the transaction, the combined company intends to dispose of some rural workplace characteristics in order to reduce the level of these holdings to around 25 % of its overall portfolio over the long term, in line with Gramercy’s specified targets.
The Gramercy management team will certainly lead the combined install, with Gordon F. DuGan as CEO, Benjamin P. Harris as president and Jon W. Clark as CFO.
Martin A. Reid, Chambers Street’s interim president and interim CEO and CFO will certainly be head of transition of the combined organisation. Charles E. Black, presently chairman of the Chambers Street Board, will certainly be the non-executive board chairman.
“This strategic combination is the next sensible step for Gramercy in producing a best-in-class net lease REIT,” DuGan, CEO of Gramercy stated. “We expect that combining with Chambers Street will develop a market leader with higher scale, wider renter and geographical diversity across the United States and Europe, and added financial versatility. With a bigger and more diverse platform, our company believe the new Gramercy will be better placed to pursue larger acquisition opportunities, which we expect going ahead.”
The combined install will keep the Gramercy name and is expected to continue to trade on the New York Stock Exchange under Gramercy’s existing ticker symbol.
The move is a big burst of growth for Gramercy, which heretofore has actually been growing mainly by obtaining one single industrial characteristic at a time. In 2014, Gramercy completed more than 100 real properties. However it does not mean it will certainly drop that strategy.
The combined solution expects to continue to be an active acquirer of single-tenant net leases and homes. It likewise means to accelerate the development of its European operations.
The merger is anticipated to enclose the 4th quarter of 2015, and is subject to customary closing conditions, including approval of the transaction by shareholders of both companies.