Griffin Realty Trust Inc., a publicly registered non-traded real estate investment trust formerly known as Griffin Capital Essential Asset REIT, has reported its “strategic monetization process” that includes spinning off a new public company and liquidating the remaining assets. The REIT also updated its net asset value per share, and reinstated redemptions under its share redemption program under limited circumstances.
The strategic monetization process is the result of the company’s previously announced review of strategic alternatives, which has been guided by its financial advisors, Goldman Sachs, Eastdil Secured, and BofA Securities.
The process will involve a separation of the REIT by spinning off a new public company that will own a portfolio of primarily industrial assets, as well as certain office assets, and listing that company’s shares on a national exchange, providing stockholders with freely tradeable shares in this new public company.
Following the separation, Griffin Realty Trust plans to sell its remaining portfolio of primarily office assets over time and distribute net proceeds to stockholders. Once these remaining assets have been sold, it intends “to fully liquidate and cease operations.”
According to the REIT, in order to facilitate this separation in the most tax efficient manner, it will seek stockholder approval to convert from a Maryland corporation to a Maryland REIT prior to proceeding with the spin-off transaction.
“We are pleased to announce this strategic monetization process and look forward to executing this plan over the coming months. Under the guidance of our financial advisors, we have determined that spinning off a portfolio…and liquidating the remaining assets over time as market conditions dictate will enable us to provide stockholders with the optimal combination of liquidity and value maximization in light of current real estate and capital market conditions,” said Michael Escalante, president and chief executive officer.
Griffin Realty Trust also reported an updated NAV per share of $7.42 as of June 30, 2022, a decrease from last year’s NAV of $9.10 per share, which the REIT attributes to a decrease in the value of office properties, which was partially offset by an increase in the value of its industrial properties.
“Office properties continue to be negatively impacted by pandemic-related work-from-home trends, while industrial assets continue to benefit from a number of favorable market dynamics, which have further increased over the course of the pandemic,” the company said.
The REIT also adopted an amended and restated share redemption program and will redeem shares in connection with a stockholder’s death, qualifying disability or determination of incompetence or incapacitation. Redemptions begin this quarter, and the first redemption date is September 30, 2022.
Griffin Realty Trust is an internally managed non-traded REIT that owns and operates a portfolio of office and industrial properties that are primarily net leased to single tenants that the company has determined to be creditworthy. As of June 30, 2022, the company’s real estate portfolio consisted of 121 properties and one land parcel held for future development, in 26 states consisting substantially of office, warehouse, and manufacturing facilities.