NEW YORK CITY—Gramercy Property Trust (GPT) said Tuesday that a Europe-focused fund sponsored by GPT had completed the previously announced sale of 100% of the fund's assets to a consortium of clients managed by AXA Investment Managers — Real Assets. GlobeSt.com reported in May that the deal by Gramercy Property Europe plc valued the assets at €1.0 billion (US$1.1 billion), with an exit cap rate of approximately 6.2%.
The sale resulted in net distributions to GPT of €90.8 million, or about US$103.8 million. Gramercy Europe (Jersey) Ltd., GPT's Jersey-based investment and asset management subsidiary, will continue to manage the assets for the buyer on a fixed-fee basis until July 2018.
The portfolio runs to about 40 properties in the UK, France, Germany, Poland and Benelux, totaling approximately 11 million square feet. The mainly single-tenant portfolio was amassed primarily through sale-leasebacks, with many of the properties developed as build-to-suits, Estates Gazette reported this past March. A key attraction of the portfolio to prospective buyers was its long unexpired lease terms.
Gramercy Property Europe was established as recently as December 2014, and so the sale to the AXA IMRA group allows investors to cash in after a relatively short period, EG reported. The publication reported that GPT engaged Eastdil Secured at the beginning of 2017 to explore options for the Gramercy Europe portfolio, after initially considering an initial public offering for the fund. The sale was seen as a precursor to the Blackstone Group's subsequent trade of its Logicor industrial platform to China Investment Corp., a US$13.8-billion sale first announced in early June.
Additionally, GPT this past Thursday disposed of one of its two remaining properties in the Goodman U.K. Joint Venture. The South Normanton, UK property was sold for £15.2 million, for an exit cap rate of about 6.0%. The remaining 187,000-square-foot property in the Goodman JV is located in the Brackmills Industrial Estate in Northampton, UK and is currently being marketed for lease. Once it's leased up, GPT expects to market it for sale.
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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.
