Columbia acquiring Normandy for $100M in New York real estate’s latest megamerger
Companies have previously teamed up on projects at 250 Church Street and 799 Broadway
Columbia Property Trust is buying Normandy Real Estate Management in a deal worth about $100 million, Columbia announced on Wednesday.
Columbia has signed a definitive agreement to acquire Normandy’s operating platform, along with its general partner interests in a trio of active management funds, the company said. The transaction is expected to close by the end of the year.
Columbia president and CEO Nelson Mills said in a statement that the merger will allow the firm “to provide fully integrated construction, development, leasing and property management services, as well as a complementary fund management platform to augment our core portfolio operations.”
Normandy was founded in 2002 and has since amassed a portfolio of more than 30 million square feet of office space in New York, New Jersey, Boston and Washington, D.C. Its current Manhattan projects include an office building at 888 Broadway in the Flatiron District and the massive Terminal Stores project in West Chelsea, which it purchased for $880 million with L&L Holding Company last fall.
Columbia and Normandy are both real estate companies with a focus on developing office buildings. The two companies have previously worked together on the redevelopment of Tribeca’s 250 Church Street and on a 182,000-square-foot development project at 799 Broadway in Greenwich Village. The firms agreed to buy 250 Church Street from Norvin Properties in February for about $200 million and are planning a $300 million office development at 799 Broadway that will stand 12 stories tall and span 182,000 square feet.
Normandy founding partners Finn Wentworth and David Welsh, along with Normandy COO Giorgios Vlamis, plan to form a new investment firm in the wake of the acquisition that will not compete with Columbia, according to a source familiar with the deal. The new company will retain ownership of a few Normandy assets that Columbia is not acquiring in areas including Westchester County, New Jersey and Newton, Massachusetts, but its investments will not focus exclusively on real estate.
Wentworth is also likely to join the board of directors at Columbia, and Welsh will also chair the investment committee for two of Normandy’s management funds that Columbia is acquiring. Normandy founding partner Jeff Gronning is expected to become Columbia’s CIO.
“We have tremendous respect for Columbia’s strategy and leadership team,” Wentworth said in a statement, “and, after launching two projects with them this past year, we’ve seen how well their culture and business model align with ours.”