Columbia Property Trust Buys Normandy Real Estate in Cash, Stock Deal

The $100 million deal further expands Columbia's presence in New York, Washington, D.C., and Boston, where more than half of the REIT's portfolio is located.
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Columbia Property Trust is set to acquire Normandy Real Estate Management’s operating platform and its general partner interests in three management funds, after having signed a definitive agreement for a roughly $100 million cash and stock transaction.

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The deal, which has been approved by Columbia’s board and Normandy’s owners, is expected to close during this year’s last quarter, with $13.5 million paid in cash and about $86.5 million of convertible preferred units at $26.5 per share. Columbia is also set to buy general partnership interests and certain limited partnership interests equating to about 2 percent of three funds: Normandy Real Estate Fund III, Normandy Real Estate Fund IV and Normandy Opportunity Zone Fund.

Normandy was assisted by Moelis & Co. as financial advisor and by Goodwin Procter as legal advisor. Columbia worked with Morgan Stanley as financial advisor and Kelley Drye & Warren and King & Spalding on the legal side.

Track record

Founded in 2002, Normandy is a developer, operator and investment manager of office and mixed-use assets and has developed more than 30 million square feet of space in New York, New Jersey, Boston and Washington, D.C. Normandy currently has some 14 million square feet in properties under management and the company’s high-profile list of redevelopments includes Terminal Warehouse, 250 Church Street and 799 Broadway, all in Manhattan, with the latter being a joint venture with Columbia.

As of mid-year, Columbia had an 8.2 million-square-foot portfolio that was 97 percent leased, according to the REIT’s website, with an average remaining lease term of a little over six years. About 90 percent of the company’s footprint is in New York, San Francisco and Washington, D.C., with additional assets in Pittsburgh, Boston and Los Angeles.

Following the deal, Normandy’s leading partners will stick with Columbia: Finn Wentworth is joining the company’s board, David Welsh is expected to become chairman of the investment committee for two of the acquired funds, while Jeff Gronning is set to become Columbia’s new CIO. Additionally, Gavin Evans and Paul Teti, partners at Normandy, will also join Columbia in leadership roles.