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QUIZ: Are You a Real Estate Mergers and Acquisitions Expert?

National
National
March 24, 2015 Jay Rickey, Director of Newsletters

Simon Property Group's $23.2B bid for rival mall owner Macerich. Cushman & Wakefield hitting the market. The merger of Cassidy Turley into DTZ. Savills' $260M acquisition of Studley. These are just a few of the recent merger and acquisition headlines in commercial real estate. It's no surprise that our industry is deal-friendly, but what may surprise you is how well your memory has maintained key details of industry M&A transactions over the last dozen years.

Are you a commercial real estate M&A expert? Take our quiz and find out!

1

The modern age of commercial real estate M&A commenced when CBRE closed on its $415M acquisition of Insignia, according to commercialobserver.com. When did this acquisition close?

April 1998
February 2003
July 2003
June 2004

YOU'RE CORRECT!

CB Richard Ellis completed its previously announced acquisition of Insignia/ESG in July 2003. The firm announced it would acquire Insignia Financial Group in February 2003, about five years after CB Commercial acquired REI Limited, the international arm of Richard Ellis, in April 1998. In June 2004, CBRE completed a successful initial public offering and began trading its Class A Common Stock on the New York Stock Exchange.

YOU'RE WRONG!

CB Richard Ellis completed its previously announced acquisition of Insignia/ESG in July 2003. The firm announced it would acquire Insignia Financial Group in February 2003, about five years after CB Commercial acquired REI Limited, the international arm of Richard Ellis, in April 1998. In June 2004, CBRE completed a successful initial public offering and began trading its Class A Common Stock on the New York Stock Exchange.

2

General Growth announced its $12.6B deal to acquire Rouse Co in August 2004. How much of a premium did GGP pay over Rouse's previous close?

9%
20%
33%
71%

YOU'RE CORRECT!

GGP agreed to pay $67.50 a share for the Columbia, Md.-based Rouse, a 33% premium over the REIT’s previous close, and also agreed to assume $5.4 billion in Rouse debt, according to NREI.com. When the deal closed, GGP was carrying $23 billion in debt, or 71% of its total capitalization. The debt in this deal helped sink GGP during the credit crisis, but the Chicago-based REIT later emerged from bankruptcy with its equity intact. GGP would also later spin-off some of its properties into a new Rouse Co.

YOU'RE WRONG!

GGP agreed to pay $67.50 a share for the Columbia, Md.-based Rouse, a 33% premium over the REIT’s previous close, and also agreed to assume $5.4 billion in Rouse debt, according to NREI.com. When the deal closed, GGP was carrying $23 billion in debt, or 71% of its total capitalization. The debt in this deal helped sink GGP during the credit crisis, but the Chicago-based REIT later emerged from bankruptcy with its equity intact. GGP would also later spin-off some of its properties into a new Rouse Co.

3

CenterPoint was acquired by CalEast Industrial for $3.9B in 2005, the same year AMLI Residential, Gables Residential and Prime Group were all taken private. What did Forbes say were the hidden values institutions saw in these REITs?

Asset Pricing & Development Pipelines
Asset Pricing & Occupier Growth
Development Pipelines & Occupier Growth
Management Teams

YOU'RE CORRECT!

Asset Pricing and Development Pipelines were identified as the two most important values hidden in REITs, Forbes reported, but Green Street analyst Jim Sullivan did tell Forbes that Calpers paid $900 million over and above the value of CenterPoint's real estate for its management team.

YOU'RE WRONG!

Asset Pricing and Development Pipelines were identified as the two most important values hidden in REITs, Forbes reported, but Green Street analyst Jim Sullivan did tell Forbes that Calpers paid $900 million over and above the value of CenterPoint's real estate for its management team.

4

CBRE announced its Trammell Crow takeover on Halloween 2006. This transaction was valued at what?

$1.2B
$2.2B
$2.9B
$4.1B

YOU'RE CORRECT!

CBRE's agreement to acquire Trammell Crow for $49.51 per share of common stock valued the transaction at approximately $2.2 billion, including the assumption of Trammell Crow Company's corporate debt as well as transaction and integration costs. The transaction closed on December 20, 2006.

YOU'RE WRONG!

CBRE's agreement to acquire Trammell Crow for $49.51 per share of common stock valued the transaction at approximately $2.2 billion, including the assumption of Trammell Crow Company's corporate debt as well as transaction and integration costs. The transaction closed on December 20, 2006.

5

Blackstone’s $39B bid for Equity Office was approved by shareholders in February 2007 after Vornado pulled its offer. This was four months after Blackstone and EOP announced their first acquisition agreement. How much did the bidding war cost Blackstone?

$1.2B
$2.2B
$2.9B
$4.1B

YOU'RE CORRECT!

"The bidding forced Blackstone to increase its offer by a total of $7 a share, or about $2.9 billion," wrote Bloomberg after the deal closed in February 2007. Blackstone and EOP first announced on November 19, 2006 that Blackstone would acquire all of the outstanding common stock of Equity Office for $48.50 per share in cash. That purchase price per share represented an 8.5% premium over Equity Office’s closing share price on November 17, 2006, and a 20.5% premium over the company’s three-month average closing price.

YOU'RE WRONG!

"The bidding forced Blackstone to increase its offer by a total of $7 a share, or about $2.9 billion," wrote Bloomberg after the deal closed in February 2007. Blackstone and EOP first announced on November 19, 2006 that Blackstone would acquire all of the outstanding common stock of Equity Office for $48.50 per share in cash. That purchase price per share represented an 8.5% premium over Equity Office’s closing share price on November 17, 2006, and a 20.5% premium over the company’s three-month average closing price.

6

In the largest M&A deal since Blackstone purchased EOP, Prologis was acquired by AMB in 2011 in a transaction the firms called what?

The Industrial Evolution
The End of Storage Wars
Distribution Renters' Paradise
A Merger of Equals

YOU'RE CORRECT!

AMB Property Corp. acquired larger rival ProLogis in an all-stock deal that the companies billed as a "merger of equals," reported wsj.com. The merger created a firm that owned and managed assets valued at about $46 billion.

YOU'RE WRONG!

AMB Property Corp. acquired larger rival ProLogis in an all-stock deal that the companies billed as a "merger of equals," reported wsj.com. The merger created a firm that owned and managed assets valued at about $46 billion.

7

CoStar's agreement to acquire LoopNet, a deal with a total equity value of $860M, was announced in April 2011. The deal surprised some given the litigious history between the two firms. Where did the idea for the merger first originate?

From an Administrative Assistant named Tess McGill
While the Two CEOs Vacationed at a Farmhouse in Southern France
At a Bisnow Schmoozapalooza
During a Court Battle

YOU'RE CORRECT!

In a letter to LoopNet shareholders, LoopNet CEO Rich Boyle said CoStar and LoopNet were engaged in discussions to settle commercial and intellectual property litigation against each other when Andrew Florance approached him to suggest the companies discuss a business combination.

YOU'RE WRONG!

In a letter to LoopNet shareholders, LoopNet CEO Rich Boyle said CoStar and LoopNet were engaged in discussions to settle commercial and intellectual property litigation against each other when Andrew Florance approached him to suggest the companies discuss a business combination.

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Contact Jay Rickey at jay.rickey@bisnow.com
Related Topics: Blackstone, CBRE, DTZ, GGP, Simon Property Group, Gables, The Macerich Co, The CoStar Group