Merger Creates $5B Net Lease REIT

Michelle Napoli is editor of Net Lease forum, from which this article is excerpted.

New York City—One of the most established net lease REITs and one of the newest plan to merge into a more diversified company with what the two pin down as a business enterprise value of $4.6 billion. When Lexington Corporate Properties Trust of New York City and Newkirk Realty Trust Inc. of Boston and Jericho, NY, combine, the newly created Lexington Realty Trust will be second among public net lease REITs by that same business enterprise value measure. Only American Financial Realty Trust of Jenkintown, PA edges it out at $4.7 billion. Realty Income Corp. of Escondido, CA is in third place with a value of $2.9 billion.

The deal appears to have originated on the LXP side of the table. In response to a question, Newkirk chairman and CEO Michael L. Ashner told analysts and others participating in a July 24 conference call that the transaction was not contemplated before Newkirk went public just last November.