New York REIT (NYSE: NYRT) said May 25 it has agreed to merge with private real estate firm The JBG Companies in a transaction that will create an $8.4 billion REIT focused on office and mixed-use properties in New York and Washington, D.C.
In early afternoon trade, shares in New York REIT had dropped close to 8 percent to trade at $9.01 per share.
Under the terms of the deal, New York REIT will acquire substantially all of the properties and the management business of JBG. In return, JBG will receive 319.9 million newly-issued shares of common stock and operating partnership units of New York REIT. JBG equity holders will own approximately 65.2 percent of the new company, with New York REIT shareholders owning the remaining 34.8 percent share.
Randolph Read, chairman of New York REIT, described the deal as “nothing short of transformative” for the company. New York REIT was created in September 2010 as a public, non-listed REIT, and began trading on the New York Stock Exchange in April 2014.
The new company will be renamed JBG Realty Trust. It will be internally managed by JBG’s current management team:
* W. Matt Kelly will serve as CEO;
* David Paul will serve as president and COO
* James Iker will serve as chief investment officer and interim chief financial officer; and
* Brian Coulter will serve as chief development officer.
Approximately 22 percent of the combined 14.5 million square foot portfolio will be located in New York, with the balance of approximately 78 percent located in premier submarkets within the Washington, D.C. metro area.