El Segundo-based Peakstone Realty Trust is heading into the private market.
Brookfield Asset Management, based in New York, is set to purchase the industrial real estate investment trust in an all-cash deal valued at about $1.2 billion, the companies announced in a Feb. 2 statement. Under the “definitive” agreement, Brookfield will purchase all Peakstone’s outstanding shares at $21 a piece, representing a 34% premium for shareholders at the final closing price on Jan. 30.
Michael Escalante, Peakstone’s chief executive, said that the company’s board of trustees and its advisers found that Brookfield’s offer suited Peakstone’s best interest as a company and delivered “significant value” to its shareholders. “We are pleased to enter this agreement with Brookfield,” said Escalante in a
statement.
For Brookfield, the acquisition allows it to grow its industrial real estate platform by integrating a REIT that manages and operates traditional industrial properties, as well as industrial outdoor storage (IOS).“This transaction recognizes the value of our industrial portfolio and the progress we have made expanding our IOS platform,” Escalante said.
Industrial-only REIT
Lowell Baron, chief executive of Brookfield’s real estate chief business, echoed that sentiment and added that Brookfield’s industrial real estate business “will benefit from strong long-term fundamentals for the warehouse and IOS sectors.”
The transaction – which has been unanimously approved by Peakstone’s board – comes after the company closed out the “disposition of all of its legacy office assets” in December, as part of a plan to evolve into an industrial-only REIT. The company’s portfolio now includes 76 industrial properties, consisting of 60 IOS sites and 16 traditional industrial properties.
As part of its deal agreement, Peakstone will “suspend payment of its regular quarterly dividend, effective immediately, until the earlier of the closing or the termination of the definitive agreement,” according to the release. The deal also includes a 30-day go-shop period, allowing Peakstone the opportunity to solicit other bids and consider alternative offers. It’s expected to close by the end of the second quarter, subject to shareholder approval.
