The New York City-based Gramercy Property, which manages commercial real estate as a REIT, announced its merger with Chambers Street earlier this year. Chambers Street is a REIT based in Princeton, NJ.
"We greatly appreciate our stockholders' overwhelming vote in support of this merger, and are confident that the new Gramercy will be a best-in-class net lease REIT with greater scale, broader tenant and geographic diversification, and a larger and more diverse platform," Gramercy CEO Gordon DuGan said in a statement on Tuesday, after the deal was approved by the company's board.
Additionally, the joint company completed the private placement of $150 million in senior unsecured notes, Gramercy Property said in a statement. The notes, due in December 2024, have a fixed interest rate of 4.97%.
So far today, 2.38 million shares of Gramercy Property have traded, versus its 30-day average of about 747,000 shares.
Chambers Street stock closed up by 3.41% to $7.74 on Thursday.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate GRAMERCY PROPERTY TRUST INC as a Hold with a ratings score of C. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income and good cash flow from operations. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- GPT's very impressive revenue growth greatly exceeded the industry average of 6.1%. Since the same quarter one year prior, revenues leaped by 86.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 184.5% when compared to the same quarter one year prior, rising from -$2.35 million to $1.99 million.
- 36.13% is the gross profit margin for GRAMERCY PROPERTY TRUST INC which we consider to be strong. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, GPT's net profit margin of 3.10% significantly trails the industry average.
- After a year of stock price fluctuations, the net result is that GPT's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, GRAMERCY PROPERTY TRUST INC's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: GPT