DRA Advisors Takes CRT Properties for Nearly $2B

At the time of the announcement, the per-share purchase price of CRT stock represented a 15.4% premium over the share price of $23.52 at the close of the NYSE on June 16 and a 17.7% premium over the prior 10-day average share price. By 11 a.m. on June 17, CRO shares had risen to $27.92 a share, approaching DRA's offered price.

CRT's board has approved the transaction, which is now subject to shareholder approval. It is not subject to any financing conditions and is expected to close late in the third quarter of this year.

CRT will pay a pro-rated dividend on its common stock through Sept. 30, 2005. Effective June 17, CRT suspended its dividend reinvestment plan and said all future dividends would be paid in cash only. Its 8.5% series A cumulative redeemable preferred stock will be converted into shares of 8.5% series A cumulative preferred stock of the surviving corporation on identical terms.

Wachovia Securities was CRT's financial advisor in the proposed transaction, and Boston-based Goodwin Procter LLP provided legal counsel. New York City-based Blank Rome LLP, which also has an office here, provided legal advice to DRA.

Locally based CRT, formerly Koger Equity, owns 137 office buildings encompassing approximately 11.7 million sf. The buildings are located in more than 25 office projects in 12 metro areas in Texas, Maryland and the Southeastern states. The portfolio was 82.9% occupied at the end of first-quarter 2005.

During a first-quarter conference call, Thomas A. Crocker, CEO, said the company had issued a proxy statement seeking approval to reincorporate from Florida to Maryland and convert to an UpREIT, which he said, would give CRT "an equal footing with our competitors among tax-motivated sellers." Calls to Crocker; Terrance McNally, CRT's SVP and CFO; and to Paul McEvoy, a marketing principal with DRA, were not returned by deadline.

DRA specializes in real estate investment management services for institutional and private investors, including pension funds, university endowments, foundations and insurance companies. It currently manages about $3.6 billion in assets.