The Real Deal New York

Witkoff, Ashner push for rapid liquidation of NY REIT

Investors have accused board of milking the process to line their pockets

August 29, 2016 12:00PM

Witkoff Ashner

From left: Steve Witkoff and Michael Ashner

Activist investors Michael Ashner and Steve Witkoff are at it again — this time, calling for the liquidation of New York REIT as quickly as possible to maximize shareholders’ returns.

In an Aug. 29 letter to shareholders, they said they have every reason to believe the board is looking to prolong the process in order to “divert value from stockholders to themselves” through a stream of fees and other expenses.

“We have a deep, reasonable suspicion that the Board and management will both prolong the liquidation process in order to milk the Company for excessive advisor’s and manager’s fees regardless of how inefficient and unfair that would be to stockholders based on their past historical conduct,” wrote Ashner, who runs Winthrop Realty Trust TRData LogoTINY and holds a stake in New York REIT jointly with Witkoff.

Earlier this month, New York REIT’s board called off the proposed $8.4 billion merger with Washington, D.C.-based JCG. Instead, it will sell off its properties one by one, including its 49 percent stake in the 1.8 million-square-foot office tower at One Worldwide Plaza the 750,000-square-foot office building at 1440 Broadway.

In the letter, Ashner and Witkoff praised the REIT for abandoning the deal, but called negotiations an “unmitigated disaster.” They added: “The JGB debacle provided a litmus test for management’s ability to properly assess and oversee a significant strategic process, for which they failed, miserably. Stockholders cannot afford a repeat.”

They further said the planned liquidation could be completed within six months, instead of the two years proposed by the REIT.

Ashner and Witkoff, who hold a stake in the REIT through WW Investors LLC, have nominated themselves to the company’s board, along with Roscommon Capital’s Gregory Hughes, attorney Neil Koenig and Wellington Management’s James Hoffmann.