PIMCO is poised to enter the office market at its low point, agreeing to buy Columbia Property Trust for $2.2 billion.
The deal for the REIT will include $19.30 per share in cash, a 16.6 percent premium from Fridays’ closing stock price, according to Reuters. The deal is valued around $3.9 billion when including debt.
Shares of Columbia Property Trust jumped 19.5 percent in pre-market trading on Tuesday. The deal is expected to close as soon as the end of this year.
Columbia Property Trust is best known for its work in the office market, which has struggled during the pandemic as more people work from home. Although office leasing doubled from July to August in Midtown Manhattan, the average asking rent is at its lowest since 2017.
The REIT is developing the Terminal Warehouse project in West Chelsea in conjunction with L&L Holding Company. The partners recently received a $1.25 billion loan on the 1.3-million-square-foot project, which will be used by office and retail tenants.
Prior to the pending PIMCO acquisition, Columbia Property Trust was considering an unsolicited bid from Arkhouse Partners for about $2.24 billion.
Columbia Property Trust manages 15 office properties, with four more under development, in addition to managing another eight million square feet of space on behalf of private investors and third parties.
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[Reuters] — Holden Walter-Warner