A trio of investment firms is looking to take Columbia Property Trust private.
The New York-based real estate investment trust received an unsolicited offer letter from the investor group, including The Sapir Organization, which owns 7M SF of New York City real estate, Arkhouse Partners and 8F Investment Partners. The group offered to buy the firm for $19.50 a share, which works out to more than $2.2B in cash, in the letter sent to Columbia Property Trust’s Board of Directors Thursday.
Stock prices for Columbia Property Trust, which is traded on the New York Stock Exchange, saw a decline since last February before the coronavirus pandemic hit. Its price per share went down $3.24 between closing on Feb. 1, 2020, to closing on March 1, 2021. The three bidding companies currently own a collective 3.3% interest in the company, they said.
The REIT, which trades under the ticker symbol CXP, saw share prices rise before markets opened Thursday after the letter became public.
“We have spent considerable energy and time evaluating Columbia’s portfolio, operating markets, management and strategy, and have made a meaningful investment in the Company,” the investors wrote in the letter. “However, we are concerned about the Company’s lengthy track record of underperformance in the public market and challenges the Company faces on its current course.”
In the letter, the three companies argue that they could deliver shareholders with "immediate liquidity at a full and fair valuation," after “years of value erosion,” while taking over the reigns to steer the company forward.
“In our view, our proposal delivers full value that exceeds what the Company can be expected to achieve in the coming years based on the expected public market challenges and leadership’s stated plans,” they state in the letter.
Columbia Property Group owns office buildings in New York, San Francisco, Washington, D.C., and Boston, including the 482K SF former New York Times building at 229 West 43rd St. in Midtown.
CXP also had signed a full-building lease with WeWork for a development project at 149 Madison Ave. in 2019, but that deal fell apart last summer. It also owns nearly 50% of the spec development 799 Broadway, which, like 149 Madison, has not yet signed a tenant, according to CXP regulatory filings.
It purchased Normandy Real Estate Partners for $100M in 2019, adding buildings such as Terminal Warehouse in Chelsea — and the large acquisition loan Normandy and its partner, L&L Holding Co., took out to buy it — to its portfolio.
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