(Bloomberg)—New York REIT Inc., a Manhattan-focused landlord that’s been under pressure from investors, agreed to be acquired by closely held JBG Cos., creating a real estate company with an enterprise value of $8.4 billion.
JBG will receive 319.9 million shares of common stock and operating units of New York REIT in exchange for stakes in buildings owned by JBG, according to a statement by the companies Wednesday. JBG, whose properties are concentrated in the Washington, D.C., area, will manage the combined company, terminating New York REIT’s current management agreement. Upon completion of the deal, JBG will own 65.2 percent of the combined company and New York REIT stockholders will own 34.8 percent.
New York REIT owns properties including a stake in Midtown’s Worldwide Plaza office tower. Activist investors including Land & Buildings Investment Management LLC’s Jonathan Litt and Winthrop Realty Trust’s Michael Ashner had urged the landlord to overhaul its board and take steps to boost shareholder value. New York REIT in October hired Eastdil Secured LLC to review options such as a sale of the company or all or some of its assets.
The combined company will have more than 14.5 million square feet (1.35 million square meters) of office, residential and retail properties, according to the statement. About 22 percent of the total will be in New York City, with the rest located in the Washington metro area, the companies said. Yale University’s investments office and JBG employees, the two largest stakeholders in JBG, will own about 10 percent and 15 percent, respectively, of the combined company.
New York REIT has struggled since founder Nicholas Schorsch became embroiled in a scandal in 2014 over accounting inaccuracies at American Realty Capital Properties Inc. Schorsch resigned late that year from the boards of New York REIT and 12 other companies.
New York REIT, formed in 2010 as a nontraded trust, started buying property during the early stages of the city’s comeback from the financial crisis. Its portfolio consists of 18 Manhattan properties and a retail building in Brooklyn, according to its website. The company has a 49 percent stake in Worldwide Plaza, a 1.8 million-square-foot skyscraper in Midtown that serves as the Americas headquarters for Nomura Holdings Inc.
To contact the reporter on this story: David M. Levitt in New York at [email protected] To contact the editors responsible for this story: Kara Wetzel at [email protected] Christine Maurus, Daniel Taub
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