Real Estate Forum - April 2009

Deals of the Year ::

Mergers & Acquisitions

JLL-Staubach Marriage Changes Services Game

Last summer’s merger between Chicago-based Jones Lang LaSalle and Staubach Co. wasn’t the largest transaction to take place in 2008, but by all accounts, it was certainly a game-changing event. Valued at $613 million, the deal brought together a significant international real estate services company and a large, US-based tenant rep firm to form a new global powerhouse positioned to meet the growing needs of its clients.

Its largest acquisition to date, the merger didn’t make JLL the biggest firm in the market, but that wasn’t the driver behind the decision to integrate, says CEO Colin Dyer. The goal was to strengthen “both our local market position in the US and our global corporate services business. Staubach has a very strong corporate client base in the Americas, and those corporate clients are increasingly looking for international services. That is something that the rest of JLL can provide.”

For his part, Roger Staubach had no intentions of selling his firm until discussions began.

“This was a strategic decision about the sustainability of our business,” he says. “This isn’t a financial sellout. It’s the ability to build a stronger company.” Integration discussions began in the first quarter of 2008, and things moved quickly from there. At the end of the day, some 1,000

Staubach employees moved over to JLL. The transaction did not include Staubach’s investment development business, Cypress Equities, or its retail arm, Staubach Retail Services.

Today, the combined entity has about 33,000 employees around the world and 11,500 in the Americas. With the addition of 14 new corporate offices to JLL’s 54 in the Americas, the company now has 68 locations in the Americas and 184 globally.

For more: http://www.reforum.com/dealsoftheyear/ma/1.html

Gramercy Doubles Portfolio
Through $3.3B Buy of AFR

Gramercy Capital Corp. significantly diversified and nearly doubled the size of its commercial real estate portfolio last spring when it acquired American Financial Realty Trust for $3.3 billion, or $5.50 per share. The New York City-based company added 29. 2 million square feet of properties to its roughly $4.2-billion portfolio of debt investments, commercial real estate securities investments, net lease properties and other assets. As part of the deal, PB Capital Corp. provided $240 million in financing for 48 buildings in the AFR portfolio along the East Coast that are 95% occupied by Wachovia. Cushman & Wakefield Sonnenblick Goldman arranged that transaction.

For more: http://www.reforum.com/dealsoftheyear/ma/2.html

Blackstone Closes On
$635M GSO Acquisition

Last March, Blackstone Group LP completed the $635-million acquisition of GSO Capital Partners LP and certain of its affiliates. Blackstone Holdings will also pay up to an additional $310 million over the next five years contingent on specified earnings targets. With offices in New York, London and Houston, GSO manages collateralized loan obligation vehicles and a variety of credit-oriented funds. New York City-based Blackstone said the combination of GSO’s businesses with its existing corporate debt operations would produce one of the largest credit platforms in the alternative asset management business, with more than $21 billion of total assets under management.

For more: http://www.reforum.com/dealsoftheyear/ma/4.html

ACC Sells 4.5M Shares
To Fuel $1.4B Merger

To fund its $1.4-billion deal with GMH Communities Trust last spring, American Campus Communities Inc. sold 4. 5 million shares of common stock in a public offering. The Austin-based student housing developer also obtained a commitment letter from KeyBank Corp. for a $200-million secured loan to acquire the student-housing portfolio of its Newtown Square, PA-based competitor. American Campus said the deal would open 41 new markets and create growth opportunities in each of the REIT’s business segments. When the transaction closed in June, the buyer’s total market cap grew to $2.5 billion from $1.3 billion and it now owns 88 student housing assets, containing 54,300 beds.

For more: http://www.reforum.com/dealsoftheyear/ma/3.html

For $350M, Balfour Beatty
Takes GMH Military Housing

Balfour Beatty plc, a United Kingdom-based international engineering, construction, investment and services entity, closed on its $350.5-million acquisition of GMH Military Housing in late May. The former military housing business of Newtown Square, PA-based REIT GMH Communities Trust now goes by the name of Balfour Beatty Communities and operates as a subsidiary of Balfour Beatty plc. The transaction gave the buyer an entrée into the military housing privatization business in the US. Through joint ventures with the Department of Defense, Balfour Beatty Communities currently has interests in a dozen housing projects on 37 military bases, worth some $3 billion, as well as one unaccompanied personnel housing project.