Columbia Property Trust to Be Taken Private by PIMCO In $3.9B Deal

Columbia Property Trust has entered into a definitive agreement to be acquired by funds managed by Pacific Investment Management Company LLC, or PIMCO,  for $3.9 billion including debt. PIMCO will acquire all of the outstanding shares of Columbia common stock for $19.30 per share in cash, representing a premium of approximately 27% over Columbia’s closing share price on Friday, March 12, 2021.

This transaction is the culmination of a comprehensive strategic review process undertaken by Columbia’s Board of Directors, which was publicly announced in the spring of this year. As part of this process, Columbia’s Board and advisors invited nearly 90 potential counterparties to participate, including strategic acquirers, private equity firms and other investment management firms.

An office REIT, Columbia’s portfolio consists of 15 properties with more than six million rentable square feet, as well as four properties under development. It also has more than eight million square feet under management for private investors and third parties. 

The office asset class is in a state of flux at the moment and from March 12, 2021 to September 3, the high barrier office sector traded down 5%. However, signs are growing that sales will improve in the second half of the year.  PIMCO expresses confidence in the market as well. 

“We continue to believe that high-quality office buildings in major US  cities offer long-term value for our clients and Columbia has assembled a modernized, well-located portfolio of assets that we expect will perform well in the years ahead,” said John Murray, PIMCO Global Head of Private Commercial Real Estate, in prepared comments. 

The transaction is expected to close as early as year-end, subject to approval by Columbia’s shareholders and the satisfaction of other customary closing conditions. Upon completion of the transaction, Columbia’s common stock will no longer be listed on the New York Stock Exchange.

Columbia shareholders will be entitled to receive the previously announced third quarter dividend of $0.21 per share payable on September 15, 2021. Thereafter, Columbia will not pay additional quarterly dividends during the pendency of the transaction.

Morgan Stanley & Co. LLC is serving as lead financial advisor to Columbia and Wachtell, Lipton, Rosen & Katz is serving as legal advisor. Eastdil Secured LLC and J.P. Morgan are also acting as financial advisors to Columbia.

Goldman Sachs & Co. LLC is serving as lead financial advisor to PIMCO and Latham & Watkins LLP and Milbank LLP are serving as legal advisors. Deutsche Bank Securities Inc. is also acting as a financial advisor to PIMCO. Cushman & Wakefield is acting as a real estate consultant to PIMCO.