Sam Zell acquires Monmouth Real Estate for $3.4B

Equity Commonwealth expands into industrial real estate

Chicago /
May.May 05, 2021 11:30 AM
Sam Zell of Equity Commonwealth and Michael Landy of Monmouth Real Estate Investment (Getty, ACRE)

Sam Zell of Equity Commonwealth and Michael Landy of Monmouth Real Estate Investment (Getty, ACRE)

As the industrial real estate sector booms, Sam Zell’s Equity Commonwealth is expanding into the field.

The billionaire’s company, which focuses on office real estate, is acquiring the big industrial firm Monmouth Real Estate Investment in a $3.4 billion, all-stock deal, according to Crain’s Chicago Business. Based in Holmdel, New Jersey, Monmouth owns 120 properties totaling 24.5 million square feet.

“The transaction provides Equity Commonwealth with a high-quality, net-leased industrial business with stable cash flows while preserving EQC’s balance sheet capacity for future acquisitions,” Zell said in a statement.

Equity Commonwealth is expected to have $2.5 billion in cash on hand following the acquisition.

The deal itself works out to $19.40 per share. Under the acquisition, Equity Commonwealth shareholders will own about 65 percent of the company and Monmouth shareholders 35 percent.

Zell might have been expected to invest in a distressed portfolio or company, given his history. Instead he bought into a sector that was hot even before the pandemic boosted e-commerce further and accelerated an industrial leasing spree by Amazon.

The office sector has struggled during the past year as tenants began working from home. However, Monmouth is not without risk. The REIT relies largely on one tenant, FedEx, which accounts for 55 percent of the company’s annual rent. Equity says it plans to diversify its tenant mix.

[Crain’s] — Sasha Jones





    Related Articles

    arrow_forward_ios
    46-81 Metropolitan Avenue in Maspeth, Queens and Prologis CEO Hamid Moghadam (Google Maps, Prologis)
    Prologis nabs majority stake in Queens industrial site
    Prologis nabs majority stake in Queens industrial site
    Mack-Cali Realty CEO Mahbod Nia and River Centre in Red Bank (Mack-Cali)
    Mack-Cali offloads Red Bank office complex for $84M
    Mack-Cali offloads Red Bank office complex for $84M
    Hamed bin Zayed Al Nahyan (Getty)
    Pandemic squeeze forces Abu Dhabi fund to reassess real estate exposure
    Pandemic squeeze forces Abu Dhabi fund to reassess real estate exposure
    SL Green CEO Marc Holliday (Getty, Sl Green)
    SL Green shareholders cry foul on CEO bonus
    SL Green shareholders cry foul on CEO bonus
    The commercial market was hit hard by the pandemic, and property tax revenue is expected to fall 5 percent. (iStock)
    Tax bills show how much Covid devalued NYC real estate
    Tax bills show how much Covid devalued NYC real estate
    Richard Segal of Seavest Investment Group, David Marx of Marx Development Group and 902 Quentin Road in Brooklyn (Photos via Seavest Investment Group, Marx Development Group and VRMNY)
    Westchester firm buys $54M Brooklyn medical building
    Westchester firm buys $54M Brooklyn medical building
    688 and 702 Court Street, Brooklyn with Madison Capital managing partner Richard Wagman (Google Maps, Madison Capital)
    Madison Capital snatches up Red Hook industrial sites for $45M
    Madison Capital snatches up Red Hook industrial sites for $45M
    Hartz Mountain Industries CEO Leonard Stern and 235 Pinelawn Road (Google Maps, Hartz Mountain)
    Warehouse developer accused of violating “Long Island First” policy
    Warehouse developer accused of violating “Long Island First” policy
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...