(EDITOR’S NOTE: Blackstone Real Estate Partners VIII, which is making the acquisition, is a-$15.8 billion opportunity fund that Blackstone closed in October 2015, according to sources familiar with the transaction. Blackstone declined to comment when contacted about the transaction. Gramercy owns 976,884 square feet in the San Francisco Bay Area and 433,199 square feet in Seattle. Its total portfolio is made up of 80.6 percent of industrial assets, 15.5 percent of office product and 3.9 percent of specialty retail properties.)
NEW YORK – Gramercy Property Trust (NYSE: GPT) today announced that it has entered into a definitive agreement with affiliates of Blackstone Real Estate Partners VIII, under which Blackstone will acquire all outstanding common shares of Gramercy for $27.50 per share in an all-cash transaction valued at $7.6 billion.
The transaction has been unanimously approved by Gramercy’s Board of Trustees and represents a premium of 23% over the 30-day volume-weighted average share price ending May 4, 2018 and a premium of 15% over the closing stock price on May 4, 2018.
Commenting on the acquisition, Gordon DuGan, Trustee and Chief Executive Officer of Gramercy said, “I speak for Ben Harris, Nick Pell and the entire team at Gramercy to say that we are very pleased to enter into this transaction. We believe this validates the quality of the portfolio and platform that we have built. Entering into this transaction with Blackstone fulfills our Board of Trustees’ mission to maximize shareholder value.”
“We are pleased to acquire Gramercy and its strong portfolio of assets,” said Tyler Henritze, head of US real estate acquisitions for Blackstone.
Completion of the transaction, which is currently expected to occur in the second half of 2018, is contingent upon customary closing conditions, including the approval of Gramercy’s shareholders, who will vote on the transaction at a special meeting on a date to be announced. The transaction is not contingent on receipt of financing by Blackstone.
Gramercy shareholders will be entitled to receive the previously announced second quarter dividend of $0.375 per share payable on July 16, 2018, and if the transaction is completed after October 15, 2018 Gramercy shareholders will receive a per diem amount of approximately $0.004 per share for each day from October 15, 2018 until (but not including) the closing date.
Morgan Stanley & Co. LLC is acting as exclusive financial advisor to Gramercy. Eastdil Secured LLC is acting as real estate consultant to Gramercy. Wachtell, Lipton, Rosen & Katz is acting as Gramercy’s legal advisor. Citigroup Global Markets Inc. and BofA Merrill Lynch are acting as Blackstone’s financial advisors in connection with the transaction. Simpson Thacher & Bartlett LLP is acting as legal advisor to Blackstone.
Gramercy will release financial results for its second quarter ended June 30, 2018 in late July, but, as a result of today’s announcement, the company will not host a conference call and webcast to discuss financial results and operations for the second quarter.
About Gramercy Property Trust
Gramercy Property Trust is a leading global investor and asset manager of commercial real estate. The Company specializes in acquiring and managing high quality, income producing industrial commercial real estate leased to high quality tenants in major markets in the United States and Europe.
Blackstone is a global leader in real estate investing. Blackstone’s real estate business was founded in 1991 and has approximately $120 billion in investor capital under management. Blackstone’s real estate portfolio includes hotel, office, retail, industrial and residential properties in the US, Europe, Asia and Latin America. Major holdings include Hilton Worldwide, Invitation Homes (single family homes), Logicor (pan-European logistics) and prime office buildings in the world’s major cities. Blackstone real estate also operates one of the leading real estate finance platforms, including management of the publicly traded Blackstone Mortgage Trust.