New York REIT, Inc. announced that it has entered into a definitive agreement to acquire substantially all of the properties and the management business of JBG Companies, forming a new $8.4 billion enterprise to be renamed JBG Realty Trust. JBG was rumored to be in talks with New York REIT earlier this month, a deal in which the Chevy Chase developer accomplishes the goal of going public — an objective it's been weighing for more than a year — without the cost and regulatory burdens of filing an initial public offering.
The combined company's portfolio will span over 14.5 million square feet of office, residential and retail properties across the gateway markets of New York City and Washington, D.C., concentrated in transportation served, urban-infill submarkets. Approximately 22% of the portfolio will be located in New York City, with the balance of approximately 78% located in premier submarkets within the Washington, D.C. Metro area. The combined portfolio includes over 9.7 million rentable square feet of high quality office assets, approximately 1.0 million rentable square feet of retail assets, and approximately 4,500 residential units.
As part of the transaction, New York REIT's external management contract will be terminated upon closing and the combined company will be internally managed by JBG's current management team. W. Matt Kelly will be named Chief Executive Officer, David Paul will be named President and Chief Operating Officer, James Iker will be named Chief Investment Officer and Interim Chief Financial Officer, and Brian Coulter will be named Chief Development Officer. Michael Happel, New York REIT's current President and Chief Executive Officer has agreed to assist in the transition and will serve as a consultant to the combined company for a transition period.
Randolph Read, Chairman of the Board of NYRT, said of the deal, "We are extremely pleased to be able to announce this transaction with The JBG Companies which is nothing short of transformative for New York REIT. This combination creates a substantial REIT in New York City and Washington, D.C. We believe that the expertise of the JBG management team is recognized throughout the industry and that this combination will provide the NYRT stockholders with a unique opportunity to participate in the value creation potential that this combination will bring." JBG Realty Trust will be headquartered in Chevy Chase, MD with a regional office in New York City.
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