NEW YORK CITY—Gramercy Property Trust and Chambers Street Properties have formally come together, with the merger that resulted in a $5.8-billion office and industrial net lease REIT closing on Thursday. The combined company, which retains the Gramercy name and New York Stock Exchange symbol, has also lined up a total of $2.25 billion in new financings.
Calling the merger closing "the beginning of an exciting new chapter for our company," Gramercy CEO Gordon DuGan says Chambers Street represents "an ideal partner for long-term growth. We are confident that shareholders will benefit from Gramercy's larger size and scale, increased financial flexibility, broader tenant diversification, and more efficient operating platform."
The combined company is now the largest office/industrial net lease real estate trust, with 299 properties totaling 56 million square feet. Forty-six percent of the tenant roister is investment grade, and the portfolio was 98.8% leased as of Thursday.
DuGan, Gramercy's CEO prior to the merger, is serving in the same capacity for the merged entity. The other key members of Gramercy's management team, including president Benjamin Harris and CFO Jon Clark, continue in those roles post-merger. The combined company will have a ten-person board, comprised of non-executive chairman Charles E. Black, Allan J. Baum, Z. Jamie Behar, Thomas D. Eckert, James L. Francis, Gregory F. Hughes, Jeffrey E. Kelter, James M. Orphanides, Louis P. Salvatore and DuGan.
Gramercy's new unsecured credit facility replaces the separate facilities for Gramercy and Chambers Street prior to their combination. It consists of an $850-million senior unsecured revolving credit facility, a $300- million three-year term loan and a $750-million five-year term loan. J.P. Morgan Securities LLC and Bank of America Merrill Lynch are serving as joint bookrunners and joint lead arrangers, with Wells Fargo Securities, US Bank and Royal Bank of Canada as joint lead arrangers; JPMorgan Chase Bank as administrative agent; and Bank of America as syndication agent.
Additionally, Gramercy has entered into a new $175-million seven-year senior unsecured term loan with Capital One that replaces Chambers Street's former seven-year term loan facility. The combined company has also completed the private placement of $150 million in senior unsecured notes.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
