Gramercy to Buy AFRT

Gramercy Capital Corp. has agreed to buy American Financial Realty Trust for $3.4 billion, the companies said.

This isn't technically a retail real estate deal (though American Financial Realty does own bank branches as part of its unique business plan to only own real estate assets related to financial companies). But it's interesting for a few reasons. With some of the talk lately that REITs may be in for a fall, clearly the companies still see value in the sector. Moreover, it's equally interesting that given problems in the debt market, the companies don't have any worries about getting this financed. Perhaps it won't even require issuing of new debt.

It's also interesting because Gramercy is technically a mortgage REIT. But it's got a strong relationship with an office REIT, SL Green Realty Corp., which owns a 25 percent stake in Gramercy.

What does it all mean? I'm not certain. But given that REITs aren't carrying too much debt and have solid operations, there may be more mergers and acquisitions opportunities out there if REIT stocks remain undervalued.

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