Gramercy Hits Milestone With Investment-Grade Rating

Gordon DuGan, CEO of Gramercy Property Trust Inc. (NYSE: GPT), joined REIT.com for a CEO Spotlight video interview during REITWeek 2015: NAREIT’s Investor Forum, held in New York.

Gramercy had an active first half of 2015 on the acquisitions front, picking up more than $600 million in new assets. The bulk of those acquisitions came through one deal for a 12-property portfolio.

“I think the dynamic in our industry has changed to where we’re now competitive buyers of portfolios of assets,” DuGan said. “As we’ve gotten larger, that’s going to be key to continuing our growth.”

Gramercy also received an investment-grade rating from Moody’s Investors Service earlier this year. DuGan called it “a very important milestone” for the company.

“To be an investment-grade-rated company means that we have access to the corporate debt markets. We can do long-term financing,” he said. “As we’re able to do that and move away from our current capitalization, which has a reliance on bank financing, I think that will show up in a better equity multiple.”

Regarding Gramercy’s investments abroad, the firm’s European property fund made its first acquisition earlier this year. DuGan said Gramercy has intended since its founding to grow its business in Europe. The company now owns a platform in London, giving it “a fully integrated presence in Europe.”

DuGan noted that one of the benefits to investing in Europe is that it is less competitive than the United States. He also pointed out that the recovery in Europe is lagging the U.S., opening up more opportunities for investment.

(Editor's note: Gramercy and Chambers Street Properties (NYSE: CSG) on July 1 announced a merger agreement to create a combined firm with an estimated enterprise value of approximately $5.7 billion.)