Gramercy Capital doubles size, diversifies with acquisition of American Financial Realty

By Lisa Kerner

Charlotte, N.C., April 1 - Gramercy Capital Corp. completed its $3.3 billion acquisition of American Financial Realty Trust, the company announced on Tuesday.

American Financial common shares were set to cease trading on the New York Stock Exchange before the market opening on Wednesday.

The companies' merger agreement gives American Financial shareholders $5.50 in cash and 0.12096 of a share of Gramercy Capital common stock for each American Financial share held, as well as $0.2419 in cash from Gramercy Capital's $2.00 special dividend declared in December.

American Financial shareholders will own approximately 31% of Gramercy Capital's outstanding shares, according to the release.

Gramercy said it also assumed a total of some $1.3 billion of American Financial secured debt.

With the acquisition, Gramercy Capital said it moves from being a pure specialty finance company into a $7.5 billion diversified enterprise with business lines consisting of commercial real estate finance and property investments.

"In one transaction, we have effectively doubled the company's size and diversified its asset base and income stream, transforming it to become a significant player in the commercial real estate equity sector as well as in structured finance," Gramercy Capital president and chief executive officer Marc Holliday said in a company news release.

"As the market improves over time, Gramercy Capital will be well positioned to take advantage of emerging opportunities on several fronts," Holliday added.

April 2 is the record date for Gramercy Capital's quarterly dividend of $0.63 per share for the quarter ended March 31. The first-quarter dividend is payable on April 15, the company said.

Gramercy Capital is a New York-based commercial real estate specialty finance company.

American Financial is a self-administered, self-managed real estate investment trust based in Jenkintown, Pa.

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