PRINCETON, NJ—Shareholders in Chambers Street Properties have approved the pending merger with Gramercy Property Trust, with investors in GPT also voting in favor of the deal at a special meeting of that company's shareholders on Tuesday. The deal is expected to close on Thursday, with the combination creating an office and industrial net lease REIT valued at $5.7 billion.

Under the terms of the merger agreement, Gramercy stockholders will receive 3.1898 shares of Chambers Street for each share of GPT common stock they own. Chambers Street shareholders will own approximately 56% of the combined company, while  GPT stockholders will own approximately 44%. The company will continue trading on the New York Stock Exchange under the Gramercy name.

"This strategic combination is the next logical step for Gramercy in creating a best-in-class net lease REIT," Gordon DuGan, Gramercy's CEO, said when the combination was announced in July.  He added that "with a larger and more diverse platform, we believe the new Gramercy will be better positioned to pursue larger acquisition opportunities, which we anticipate going forward,"

Gramercy's management team will lead the combined company, including DuGan, president Benjamin Harris and CFO Jon Clark. Chambers Street CFO Martin A. Reid, who is also serving as its interim president and interim CEO, will head transition for the combined company.

The newly merged entity will own a portfolio of 288 properties and 52 million square feet in major markets throughout the US and Europe. The combination is expected to result in greater size and scale, broader tenant diversification, increased financial flexibility and a more efficient operating platform to drive growth.

In terms of portfolio diversification, the top 10 tenants of the merged entity will represent less than 30% of total annualized base rent, with no one tenant representing more than 7.5%. Eighty-five percent of the combined company's real estate assets will be in target markets, such as New York/New Jersey, Dallas, Baltimore/Washington, DC, Los Angeles and South Florida. The combined portfolio will have an average lease term of more than seven years, and 43% of its tenants will be investment grade.

Following the close of the merger, the combined company also intends to dispose of certain suburban office properties, with a view toward reducing the level of these holdings to approximately 25% of its total portfolio over the long term, in line with Gramercy's stated targets. In addition, the combined company expects to continue to be an active acquirer of single-tenant net leases and properties. It also plans to accelerate the growth of its European operations.

The merger continues a trend toward consolidation and privatization in the REIT sector that has continued throughout 2015. Earlier on Tuesday, Inland Real Estate Corp. became the latest REIT to be taken private, agreeing to be acquired by affiliates of DRA Advisors in a deal valued at $2.3 billion, including the assumption of debt. Earlier this month, American Homes 4 Rent and American Residential Properties announced what will be the second major consolidation in the single-family REIT space, following a similar announcement in September from Starwood Waypoint Residential Trust and Colony American Homes.