Gramercy Capital Corp. Closes the Previously Announced Acquisition of a $485 Million Portfolio in a Joint Venture with Garris...
06 Diciembre 2012 - 3:34PM
Business Wire
Gramercy Capital Corp. (NYSE: GKK) announced today that
it has closed in a joint venture with Garrison Investment Group
(“Garrison”) on the acquisition of a 115-property portfolio
(“Portfolio”), for a total purchase price of $485 million ($87 per
square foot). The Portfolio was acquired from an affiliate of KBS
Real Estate Investment Trust, Inc. (“KBS”). At closing, the Company
and Garrison collectively capitalized the joint venture, on a 50/50
basis, with an equity investment of approximately $141 million,
plus deal expenses. The Company funded its portion of the equity
contribution with approximately $56 million in cash and the
issuance of six million shares of common stock to KBS, valued at
$15 million at the execution date of the purchase agreement.
The Portfolio totals approximately 5.6 million square feet and
is comprised of office buildings, branch-office buildings and
operations centers. Bank of America, N.A. (“Bank of America”)
leases approximately 81% of the total Portfolio and total occupancy
is approximately 88%. The Portfolio consists of two sub-portfolios:
The core portfolio (“Core Portfolio”), which consists of 67 assets
and the held-for-sale portfolio (“Held-For-Sale Portfolio”) which
consists of 48 properties. The joint venture’s strategy is to
retain a core net-lease portfolio of high quality assets leased to
Bank of America in primary and strong secondary markets and sell
non-core, multi-tenant assets.
The Core Portfolio consists of 67 assets located in ten states.
It is 98% occupied, with 96% leased to Bank of America under a
10.5-year master lease. For 2013, the Core Portfolio is expected to
generate net operating income of approximately $27.2 million. At
closing, the joint venture financed the Core Portfolio with a $200
million first mortgage.
The Held-For-Sale Portfolio consists of 48 assets located in 13
states that are 68% leased to Bank of America. Concurrently with
the purchase of the Portfolio, the joint venture sold two
multi-tenant office buildings for net proceeds of approximately
$144 million. The two buildings sold at closing were a one million
square foot multi-tenant office building located in downtown
Chicago and a 406,000 square foot multi-tenant office building
located in downtown Charlotte. Proceeds from these sales were used
to reduce the capital contributions required by the Company and
Garrison to fund the joint venture. The joint venture plans to sell
the remaining 46 Held-For-Sale assets over the next 12-18 months
for expected net proceeds of approximately $50 million. For 2013,
the Held-For-Sale Portfolio is expected to generate net operating
income of approximately $3.2 million.
Gordon F. DuGan, Chief Executive Officer of Gramercy Capital
Corp., commented, “We couldn’t be more excited about this
acquisition. The transaction allows Gramercy to deploy a
significant amount of capital into an attractive, high-yielding,
net lease opportunity. Furthermore, Garrison has been a tremendous
partner in closing the largest and most complicated deal in my
24-year career.”
About Garrison Investment Group
Garrison Investment Group is a leading middle market credit and
asset based investor, Garrison’s investment strategy focuses on
unique middle market transaction across real estate, corporate
credit, commercial & industrial and consumer loans. The firm is
based in New York, has 63 employees (47 investment professionals)
and manages in excess of $3 billion in assets under management.
About Gramercy Capital Corp.
Gramercy Capital Corp. is a self-managed, integrated commercial
real estate investment and asset management company. The Company’s
Gramercy Realty division currently manages approximately $1.9
billion of commercial properties leased primarily to regulated
financial institutions and affiliated users throughout the United
States. The Gramercy Finance division manages approximately $1.8
billion of whole loans, bridge loans, subordinate interests in
whole loans, mezzanine loans, preferred equity, commercial
mortgage-backed securities and other real estate securities which
are financed through three non-recourse CDOs. The Company is
headquartered in New York City and has regional investment and
portfolio management offices in Jenkintown, Pennsylvania,
Charlotte, North Carolina, and St. Louis, Missouri.
To review the Company’s latest news releases and other corporate
documents, please visit the Company's website at www.gkk.com or
contact Investor Relations at 212-297-1000.
(GKK-EN)
Forward-Looking Information
This press release contains forward-looking information based
upon the Company's current best judgment and expectations. Actual
results could vary from those presented herein. The risks and
uncertainties associated with forward-looking information in this
release include, but are not limited to, factors that are beyond
the Company's control, including the implementation of the new
business strategy, the integration of the new management team, the
results of the operational review and those factors listed in the
Company's Annual Report on Form 10-K and in the Company's Quarterly
Reports on Form 10-Q. The Company undertakes no obligation to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. For further
information, please refer to the Company's filings with the
SEC.
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