GlobeSt.com EXCLUSIVE: Archon Will Buy WP and WIP for $1.2B

According to sources with knowledge of the deal, the new company will be headed by Richard Previdi, who founded and currently heads WP Commercial as CEO. Michael Nachamkin, president and co-founder of Whitehall Industrial, will run the new company's New Jersey division. Both companies had been owned by senior management and by Goldman's Whitehall Street Real Estate Funds.

Officials at Goldman Sachs could not be reached for comment.

Most of the two companies' senior management will be coming over to the new organization, according to sources. The company will continue to operate in its three primary markets – metro New York/New Jersey, metro Boston and metro DC/Baltimore – and will continue to maintain offices in the latter two markets.

"Both companies have been operating within the Goldman Sachs umbrella, and this way they can leverage the two operating platforms and take advantage of all the synergies," a source close to the deal tells GlobeSt.com. "Goldman initiated the deal, which has been in the works for some time. They had these two growing companies, operating with a similar strategy, and decided it was time to put them together.

"In a sense, they're leveraging institutional capital with entrepreneurial talent," the source continues. "They're going to be looking at the market very opportunistically in the months ahead – they're getting ready to leverage up and do a lot of deals."

While WP has been focusing on buying and selling office properties to the tune of a 5.5 million-sf portfolio, and WIP has focused on industrial assets, Archon Atlantic will go after both property types and add retail to the mix, with the New Jersey market considered a top priority.

"This deal gives them the opportunity to do deals in a lot of different property types," according to the source.

For Previdi, it's the fourth company he's formed with Goldman, beginning with the 1996 formation of Wellsford Commercial Properties Trust, predecessor to WP Commercial, which he co-founded in 2000. With Nachamkin, and with the Whitehall Street Limited Partnership of Goldman Sachs, he helped found Whitehall Industrial Properties in 1999.

For its part, Archon Group currently manages investments totaling more than $15 billion in North America, Asia and Europe. It has completed, on behalf of the Whitehall Street Real Estate Funds and others, more than 100 portfolio and single-asset transactions in a dozen countries. Archon was founded in 1996 by Goldman Sachs when it acquired and consolidated the investment, asset management and development functions previously done by third parties for a variety of private and institutional clients.

Following the publication of this article, a Goldman Sachs spokesperson issued the following statement to GlobeSt.com: "Although some discussions are taking place about a restructuring, among Goldman Sachs-controlled affiliates, no asset sales are taking place and many aspects of your article are wrong." The spokesperson would not comment further on the facts of the story.