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Deals & Dealmakers

Midtown office towers may be up for sale as New York REIT faces liquidation

Midtown office properties such as 333 West 34th Street and 1440 Broadway may be up for sale as New York REIT announced its plan to offload assets as it undergoes liquidation. The company, which withdrew from a planned merger with real estate investment firm JBG Companies earlier this month, said that the plan is the “next logical step” as it looks to maximize returns for shareholders.

“This plan of liquidation is the next logical step in our previously announced plan to sell the assets of the company and distribute the net proceeds to our stockholders. There are advantages in a formal plan of liquidation for completing the monetization of the company’s assets, and that is why the board has taken this action. Our stockholders have expressed their support for our plan to sell assets and this plan of liquidation will allow us to accomplish that task in the most efficient manner,” said Randolph Read, the chairman of the board of NYRT.

As part of the plan, proceeds from the sale will be distributed among the firm’s investors. After that, the company will be dissolved. According to the NYRT’s second quarter supplemental information, the company has an enterprise value of $2.8 billion. During the period, the company’s portfolio, which is entirely in New York City, had an occupancy rate of 93 percent.

NYRT’s shareholders were against its earlier plan to merge with JBG Companies. The two sides agreed to back out of the deal as they faced steep odds in formal shareholder votes. Michael Happel, the CEO and President of NYRT, signaled that his company remains open to entertaining a “compelling offer.”

“We believe that moving forward with a plan of liquidation and selling our assets in an orderly manner will maximize value for our stockholders, while also preserving the flexibility to pursue a sale of the company should a compelling offer that delivers superior value be made,” he said.

The company’s board of directors approved the plan with a vote of five to one. The proposal now faces a shareholder vote during a special stockholders meeting.

According to the company’s website, NYRT has eight office properties and eight retail spaces in New York City. These include towers such as Worldwide Plaza at 825 Eighth Avenue, the “Twitter Building” at 245-249 West 17th Street and One Jackson Square at 122 Greenwich Avenue. NYRT said that a “significant number” of potential buyers have expressed interest in acquiring individual properties. The company estimates that net proceeds for investors will be between $8.73 to $11.50 per share. This range covers the stock’s current share price. It opened at $9.91 on Monday.

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