This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Gramercy Capital Corp. Closes The Previously Announced Acquisition Of A $485 Million Portfolio In A Joint Venture With Garrison Investment Group

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.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

Chart of I:DJI
DOW 17,689.86 -56.12 -0.32%
S&P 500 2,103.84 -4.79 -0.23%
NASDAQ 5,128.2810 -0.5040 -0.01%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs