NEW YORK — Gramercy Property Trust Inc. (NYSE: GPT) has agreed to buy Garrison Investment Group’s 50 percent interest in a joint venture that owns a portfolio of 67 properties totaling approximately 3.1 million square feet across the United States for $92.2 million in cash. The properties are 96 percent leased to Bank of America. Gramercy currently owns the remaining 50 percent interest of the joint venture.
The purchase and sales agreement values the joint venture’s assets at $395 million. At closing, New York-based Gramercy plans to repay the existing $200 million loan encumbering the portfolio with proceeds from a new unsecured credit facility. The acquisition is expected to close sometime during the second quarter.
Additionally, Gramercy has also signed a commitment letter with J.P. Morgan Securities LLC and Merrill Lynch; Pierce, Fenner & Smith; J.P. Morgan Chase Bank; and Bank of America for a $400 million senior unsecured credit facility, which will consist of a $200 million senior revolving credit facility and an up to $200 million senior term loan.
The revolving credit facility has an initial term of four years, with an option for a one-year extension, and will replace Gramercy’s senior secured credit facility. The term facility has an initial term of five years and will be used to repay the existing $200 million mortgage loan encumbering the joint venture portfolio properties. Gramercy has the ability to increase the amount of the facilities up to a maximum amount of $800 million, in the aggregate, subject to lender approval and satisfaction of certain customary conditions.
Gramercy Property Trust, led by CEO Gordon DuGan, was founded in 2004 as Gramercy Capital Corp. Today, Gramercy is a fully integrated, self-managed commercial real estate investment trust that acquires and manages industrial and office properties net leased in major markets throughout the United States.
Gramercy’s stock price closed at $5.13 per share on Monday, up from $4.70 per share on May 13, 2013.
— Scott Reid