The buy has been sanctioned by the shareholders of both firms and is expected to close in the first quarter. When that happens, Gramercy, as a company statement explains, will be transformed "from a pure specialty finance company into a more than $7-billion diversified enterprise with complementary business lines consisting of commercial real estate finance and property investments. After completion of the transaction, Gramercy expects to own approximately 27 million sf of commercial real estate in 37 states to add to its $3.5 billion of debt investments."

"Gramercy Capital has performed well for its stockholders since the company was launched in 2004," says CEO Marc Holliday. AFR will "provide a powerful growth engine. We believe that the American Financial portfolio contains unrealized potential that we are uniquely qualified to extract. By combining Gramercy's financial resources and capital-markets expertise with SL Green's recognized portfolio investment and asset-management skills, we can fully realize the vision behind the original creation of American Financial."

Banc of America Securities LLC, Greenhill & Co. LLC and Deutsche Bank Securities Inc. served as financial advisors to American Financial, and Greenhill & Co. LLC has delivered a fairness opinion in connection with the transaction. Wachtell, Lipton, Rosen and Katz and Morgan, Lewis & Bockius LLP served as legal counsel to AFR.On the Gramercy side, Citi, Goldman Sachs & Co. and Morgan Stanley acted as financial advisors, and Clifford Chance US LLP served as legal counsel. Fried, Frank, Harris, Shriver & Jacobson, LLP acted as special counsel.

GlobeSt.com will update this story after today's Gramercy conference call.