Gramercy Property Trust (NYSE: GPT) said May 7 that it has agreed to be acquired by affiliates of Blackstone Real Estate Partners VIII for $27.50 per share in an all-cash transaction valued at $7.6 billion.
The offer represents a 15 percent premium above Gramercy’s closing share price of $23.82 on May 4. Completion of the transaction is currently expected to occur in the second half of 2018.
Gramercy specializes in acquiring and managing income-producing industrial real estate leased in growing population centers across the United States.
Gordon DuGan, CEO of Gramercy said, “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 U.S. real estate acquisitions for Blackstone.
Ki Bin Kim, analyst at SunTrust Robinson Humphrey, described the takeout offer for Gramercy as a “fair price.”
“Industrial REITs remain highly sought after in the private/public markets as it is one of few real estate asset classes that is experiencing true market rent growth,” Kim added.
John Massocca, analyst at Ladenburg Thalmann, said the transaction is “indicative of a continuing disconnect between private market valuations for industrial assets and stock prices of industrial-focused and single-tenant net lease REITs.”
Massocca noted that although some of this gap has closed in the wake of the proposed acquisition by Prologis, Inc. (NYSE: PLD) of DCT Industrial Trust (NYSE: DCT), concerns about the impact of interest rate increases on REIT valuations “have obscured continuing strong demand for industrial properties.”