Sam Zell is sweetening his bid to acquire a major industrial landlord after an independent advisory firm's recommendation against the acquisition and the introduction of a competing bid.

Equity Commonwealth, for which Zell serves as chairman, has modified its offer to buy Monmouth Real Estate Investment Corp., RTTNews reports. Equity, the Chicago-based REIT, is now proposing a cash option that would pay Monmouth shareholders $19 per share as an alternative to receiving 0.713 shares of EQC stock. The transaction still values Monmouth at roughly $3.4B and would create an entity worth about $5.5B.

Independent advisory firm Institutional Shareholder Services recommended that Monmouth shareholders vote against Equity Commonwealth's initial offer at a meeting on Aug. 24, The DI Wire reported. ISS cited as primary reasons for its recommendation the increased certainty of a competing offer and Equity Commonwealth's lack of track record in the industrial sector.

“In consideration of [Equity Commonwealth’s] limited presence in industrial real estate, and the noticeable gap between [Equity Commonwealth’s] recent industrial acquisition history and the billions of dollars of acquisitions that are planned for the combined company, there remains substantial uncertainty that the combined company will be able to execute on the post-transaction opportunities touted by [Monmouth’s] board,” the ISS report said, according to the DI Wire.

In July, Starwood Capital Group submitted a competing offer to buy Monmouth at $18.70 per share, entirely in cash, through its nontraded Starwood Real Estate Income Trust. A week later, Starwood increased its offer to $18.88 per share, a price that factors in the $0.63-per-share termination fee owed to Equity Commonwealth should Monmouth back out of its May agreement.

Equity Commonwealth's initial offer, accepted by Monmouth's board in May, was for an all-stock transaction that valued each share of Monmouth at 0.67 EQC shares, which at the time amounted to $19.40. The narrowing of the two companies' valuations in the intervening months accounts for the new calculations under the same overarching price tag.

Monmouth's portfolio of 120 net-leased industrial properties totaling over 24M SF with a 99.7% occupancy rate stands out as a coveted asset in a market where demand for distribution centers outstrips supply by over 650M SF, according to a June research report from JLL.