New York REIT has entered into a definitive agreement with The JBG Companies to contribute substantially all of their properties to NYRT resulting in a new REI.
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The new REIT whould have a premier property portfolio in New York City and the Washington, D.C. area. Upon completion of the transaction, whereby NYRT will acquire substantially all of the properties and the management business of JBG, the combined company, to be renamed JBG Realty Trust, will form an estimated $8.4 billion enterprise value REIT.
This is making it one of the largest REITs owning high quality office and mixed-use properties in urban-infill locations. The transaction will be tax-free to NYRT shareholders. The combined company will be headquartered in Chevy Chase, MD with a regional office in New York City.
The combined company's portfolio will span over 14.5 million square feet of office, residential and retail properties across the gateway markets of New York City and Washington, D.C., concentrated in transportation served, urban-infill submarkets.
Approximately 22% of the portfolio, by rentable square feet (RSF), will be located in New York City, with the balance of approximately 78% located in premier submarkets within the Washington, D.C. Metro area.
The combined portfolio includes over 9.7 million RSF of high quality office assets, approximately 1.0 million RSF of retail assets, and approximately 4,500 residential units.
In addition, a meaningful portion of the company's assets are in mixed-use districts involving a high density mix of commercial and residential buildings with anchor, specialty and neighborhood retail.
The combination transaction is subject to certain conditions, including approval by the NYRT stockholders of the issuance of common stock and operating partnership units in the transaction.
JBG has received all required approvals for the transaction from its owners and JBG Fund Advisory Committee members. The board of directors of NYRT has approved the combination agreement and recommends that its stockholders approve the issuance of common stock and operating partnership units in the transaction.
Under the agreement, JBG will receive 319.9 million shares of common stock and operating partnership units of NYRT in exchange for the direct and indirect interests in the contributed JBG properties and the contribution of its management company (which equity consideration is subject to adjustment for certain cash payments and the possible exclusions of a limited number of designated properties if required consents are not obtained).
Upon closing of the transaction, NYRT stockholders at the time of completion will own approximately 34.8% of the combined company's shares and units and JBG equityholders will own approximately 65.2%. ■