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Annaly to Sell U.S. Portfolio to PE Firm Slate in $2.33B Deal

Annaly Capital Management agreed to sell its real estate portfolio, including grocery-associated assets, to Slate Asset Management for $2.33 billion

Annaly Capital Management  (NLY)  agreed to sell its commercial real estate business to the Toronto private-equity firm Slate Asset Management, the company and the firm said.

The deal is valued at $2.33 billion and includes interest-earning real estate loans, debt securities and real estate equity positions, Slate said in a statement.

Annaly, New York, invests in and finances residential and commercial real estate.

The real estate portfolio includes $800 million of equity and nearly $1.53 billion in financing, media reports say.

Within the deal, a $400 million portfolio of grocery-anchored real estate assets in major U.S. markets will be purchased by Slate Grocery REIT, SRRTF Slate's U.S. grocery-anchored business, the PE firm said.

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Slate Grocery REIT will acquire 25 properties comprising 3.1 million square feet in New York, Texas, Georgia, Ohio, Florida, Indiana and California, media reports say.

The major grocery chains associated with these assets include Tops, Market 32 (Price Chopper) and Tom Thumb’s.

The deal is expected to close by midyear, subject to conditions including regulatory clearances.

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“This transaction delivers compelling execution for our shareholders" and provides additional capacity to expand operations in the residential mortgage finance market, Annaly Chief Executive and Chief Investment Officer David Finkelstein said in a statement.

A number of Annaly employees are set to join Slate. These include Timothy Gallagher, Annaly’s head of commercial real estate, and Michael Quinn, who heads commercial investments.

At last check Annaly Capital Management shares were 0.3% higher at $8.89.