Lou Conforti, CEO of Washington Prime Group.]]>
previously announced merger between JGB and New York REIT Inc. (NYSE: NYRT), expected to create an $8.4 billion New York City and Washington, DC REIT, was terminated by mutual agreement. Vornado shareholders are expected to own 74% of the combined company, JBG limited partners are expected to own 20%, and JBG management is expected to own 6%. The combined company’s portfolio will consist of 50 office properties totaling 11.8 million square feet, 18 multifamily properties with 4,451 residential units, and 11 other properties totaling 0.7 million square feet. These assets are located in premier submarkets within the Washington, DC metropolitan area, concentrated in Downtown District of Columbia, Crystal City and Pentagon City, the Rosslyn-Ballston Corridor, Reston, and Bethesda. Following the spin-off, Vornado will be a New York-focused office and high street retail REIT that will own 18.7 million square feet of Class A Manhattan office properties in the best submarkets, the largest Manhattan high street retail portfolio, encompassing 3.1 million square feet in 72 properties, and prime franchise assets in San Francisco and Chicago. “In addition to our irreplaceable portfolio in New York City, Vornado has a fortress balance sheet, significant dividend growth potential driven by recently signed leases, and a unique value creation opportunity from our Penn Plaza holdings,” said Vornado’s Roth. Goldman, Sachs & Co. and Morgan Stanley & Co. LLC are Vornado’s exclusive financial advisors and Sullivan & Cromwell LLP and Roberts and Holland are legal advisors to Vornado in connection with the proposed transactions. BofA Merrill Lynch is the exclusive financial advisor and Hogan Lovells US LLP is the legal advisor to JBG. Steven Roth, Chairman and CEO, Vornado Realty Trust.]]>
reported by ExitHub. The merger brings together two complementary farmland portfolios. FPI’s assets are comprised primarily of row crop farmland, while AFCO’s portfolio is concentrated in specialty and permanent crop farms across the U.S. On a consolidated basis, the combined company’s portfolio is expected to consist of approximately 75% row crop farmland and 25% specialty crops by value. “This merger will significantly increase FPI’s diversification across crops and geographies,” said FPI chairman and CEO Paul Pittman, who will remain in his current role after the closing. He is a successful agribusiness and former high-tech entrepreneur, with over a decade of previous investment banking and head of M&A experience at ThinkEquity Partners, Merrill Lynch and Wasserstein Perella. “We are confident that the complementary nature of this transaction will accomplish our goal of enhancing stockholder value,” said AFCO’s CEO Tom Gimbel, who will join FPI’s board after the closing, together with AFCO’s chairman D. Dixon Boardman. Each share of AFCO common stock and each AFCO operating partnership unit will be converted into the right to receive 0.7417 shares or units of newly issued FPI common stock or units. The merger is intended to qualify as a tax-free reorganization. Both company’s boards of directors have approved the transaction and recommend the transaction for approval by their respective stockholders. The deal is subject to customary closing conditions, and is expected to close late this year or early next year. AFCO’s operations are expected to be consolidated into FPI’s Denver-based headquarters. The deal is expected to contribute $16 million of revenue in 2016, increasing FPI’s total revenue from $26 million to $42 million, and is expected to be 10% accretive to FPI’s AFFO per share in 2017, growing to 20% as synergies are fully realized. AFCO was founded in 2009 by a team of New York tycoons and global investment professionals across the agriculture, real estate, and alternative investment industries: D. Dixon Boardman (chairman of Optima Fund Management), Harrison T. LeFrak (vice chairman and managing director of the LeFrak Organization), Alfonso and J. Pepe Fanjul (owners of Florida Crystals Corp.), and William von Mueffling (head of Cantillon Asset Management). Photo: Dixon and Arriana Boardman, at The Society of Memorial Sloan Kettering’s Special Projects Annual Dinner, October 9, 2014. (Patrick McMullan Company)]]>
American Finance Trust Inc. (AFIN) and American Realty Capital – Retail Centers of America Inc. (RCA), both publicly registered, non-traded real estate investment trusts (REITs) controlled by real estate powerhouse AR Capital, also known as AR Global, co-founded and led by Nicholas S. Schorsch and William M. Kahane, said they agreed to merge. The deal is valued at $1.4 billion, payable in a combination of AFIN common shares and cash, plus the assumption of certain debt. The scandal-plagued real estate group has been seeking an exit, including a sale or consolidation of over half a dozen of its REITs since last year. RCA is a REIT focused on the acquisition of core retail properties, with an emphasis on multi-tenant power and lifestyle centers across the United States. AFIN is a REIT focused on acquiring a diversified portfolio of commercial properties, with an emphasis on single tenant buildings with net-leases across the United States. The deal is said to create a diversified REIT with a retail focus, with an enterprise value of $3.9 billion. It would own 494 properties, comprising 20.8 million rentable square feet of single-tenant net lease, power center, and lifestyle center assets, and would increase RCA’s weighted average remaining lease term from 5.3 years to 8.0 years for the combined company.
“We are pleased to announce today’s transaction which will bring together two high quality real estate portfolios and will create a best-in-class diversified REIT with a retail focus.”Last month, another AR Capital affiliate, New York REIT Inc. (NYSE: NYRT), cancelled a previously announced merger with The JGB Companies to create an $8.4 billion NYC-DC REIT colossus. NYRT said it will sell off its individual assets and distribute the proceeds to shareholders. The move comes a few months after affiliates American Realty Capital Healthcare Trust III Inc., and Healthcare Trust Inc., formerly operating as American Realty Capital Healthcare Trust II Inc., also started seeking strategic alternatives, including a sale, in the midst of a crowded field of REITs being put up for sale and exploring strategic options. Other competing REITs recently being shopped include American Farmland Company (NYSE MKT: AFCO), AdCare Health Systems Inc. (NYSE MKT: ADK), KBS Legacy Partners Apartment REIT (non-traded), KBS Strategic Opportunity REIT (non-traded), Stratus Properties Inc. (NASDAQ: STRS), and InvenTrust Properties Corp. (non-traded, formerly Inland American), which announced the spin-off of its Highlands REIT Inc. earlier this year.
—Michael Weil, Chief Executive Officer of AR Capital/AR Global, AFIN, and RCA.
Both AFIN and RCA are advised and directly or indirectly owned and controlled by AR Capital LLC, AR Global, and AR Global Investments LLC (the successor business to AR Capital LLC, operating as AR Global), all of which, in addition to NYRT and the Healthcare Trusts, share certain executive officers and directors, as well as the same office space at 405 Park Avenue in Manhattan.AR Capital, formerly operating as American Realty Capital, was co-founded in 2006 by Nicholas S. Schorsch and William M. Kahane. AR Global Investments LLC operates as a subsidiary of AR Capital LLC, a full service investment management firm providing advisory services to retail and institutional investors. AR Capital’s AR Global is one of the largest alternative asset managers in the world, with over $18 billion of real estate and loans under management. AR Global’s investment programs include net leased properties in the U.S. and Europe, and domestic strategies focused on healthcare real estate, hotels, retail shopping centers, and New York City office buildings, as well as both real estate loans and corporate credit. On November 9, 2015, private equity giant Apollo Global Management, LLC (NYSE: APO) and AR Capital, LLC announced that they have mutually agreed to terminate a planned transaction pursuant to which Apollo would have purchased for $378 million a controlling interest in newly formed AR Global Investments LLC, owning a majority of AR Capital’s asset management business. A week later, on November 16, 2015, AR Capital announced the suspension and acceptance of new subscriptions to certain of its current investment programs effective December 31, 2015, “as a result of regulatory and market uncertainty.” “Until there is greater clarity, we have decided to sit this one out,” said Kahane at the time, adding, “we do not intend to register any new product offerings nor pursue any of our existing offerings after December 31, 2015. Naturally, as the government’s position becomes clearer, we may reconsider our present posture on these issues.” AR Capital’s decision came within days after the state of Massachusetts charged Realty Capital Securities (RCS) with fraudulently securing proxy votes to support real estate deals sponsored by AR Capital, which is owned by Schorsch and Kahane.]]>