Columbia Property Trust to buy out Normandy Real Estate

Columbia Property Trust has signed a definitive agreement to acquire Normandy Real Estate Management, a leading developer, operator and investment manager of office and mixed-use assets in New York, Boston, and Washington, D.C.

Columbia will acquire Normandy’s operating platform and its general partner interests in three active management funds in a cash and stock transaction with a total value of approximately $100 million, consisting of $13.5 million in cash and approximately $86.5 million in convertible preferred units, issued at a strike price of $26.50 per share.

In addition, Columbia will acquire 2 percent interests in each of Normandy Real Estate Fund III, Normandy Real Estate Fund IV and Normandy Opportunity Zone Fund. Not included in the transaction are Normandy Real Estate Fund and Normandy Real Estate Fund II, as well as several mixed-use suburban development projects.

“Expanding our platform — both our capabilities and presence in our key markets — is highly supportive of Columbia’s long-term growth objectives,” said Nelson Mills, president and CEO of Columbia. “By joining forces, we will be able 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 has acquired or developed more than 30 million square feet of office space across New York, New Jersey, Boston, and Washington, D.C., including dozens of major headquarters facilities for leading companies.

The firm has also completed many value-adding repositioning projects, and current projects in Manhattan include the Terminal Warehouse, an iconic 1.2 million-square-foot, brick-and-beam property in the West Chelsea Historic District, and 888 Broadway, a 237,000-square-foot, architecturally-significant redevelopment in the Flatiron District.

In addition, Columbia and Normandy have previously announced joint venture partnerships on 799 Broadway, a 182,000-square-foot, ground-up development project near Union Square Park, and the redevelopment of 250 Church St. in Tribeca.

These development and repositioning projects have been funded by a series of discretionary real estate funds and joint ventures managed by Normandy and backed by a number of respected institutional investors. Normandy currently manages approximately 14 million square feet of assets across the Northeastern United States on behalf of its various fund investors and joint venture partners.

“The strategic combination of Columbia and Normandy will form a stronger company with an exceptional gateway market portfolio, a world-class team and a robust pipeline,” said Finn Wentworth, partner at Normandy. “We believe that combining our development expertise and deep relationships in New York, Boston and D.C. with Columbia’s platform will create a formidable force in these markets.”

The transaction is expected to close by the end of 2019, pending the completion of customary closing conditions.