PLD Prologis

By Imani Moise 

Commercial real-estate fund Gramercy Property Trust said Monday that it reached a deal to sell itself to Blackstone Group LP for about $4.42 billion in cash.

At $27.50 a share, the offer represents a 15% premium to Gramercy's Friday closing price. Shares in Gramercy jumped to match the offer price during morning trading.

Gramercy owns industrial, office and specialty real estate in major markets across the U.S. including South Florida, Philadelphia and Los Angeles.

"We are pleased to acquire Gramercy and its strong portfolio of assets," said Tyler Henritze, head of U.S. real estate acquisitions for Blackstone.

Blackstone is the world's largest real-estate investor with roughly $120 billion in investor capital under management, including both residential and commercial properties.

The deal marks the second major acquisition in the real-estate investment trust industry in recent weeks. Prologis Inc. last week agreed to buy DCT Industrial Trust Inc., which owns bulk distribution and industrial properties, for $8.4 billion including debt.

For months, many REITs have been trading at steep discounts to the private market valuations of their properties. The higher prices in the private market, combined with rising interest rates, have cooled the sales volume of privately held commercial real estate.

But the lower valuations of the public companies have made REITs more attractive buyout targets. Some analysts have been predicting that the disconnect between the public and private market valuations would lead to more mergers and acquisitions activity in the REIT world.

Peter Grant contributed to this article.

Write to Imani Moise at imani.moise@wsj.com

(END) Dow Jones Newswires

May 07, 2018 11:57 ET (15:57 GMT)

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