Press Release

Gramercy Property Trust Launches New Joint Venture to Acquire, Own, and Manage Newly Constructed, Class A, E-Commerce Distribution Facilities Throughout the U.S.

Company Release - 8/22/2017 5:01 PM ET

NEW YORK--(BUSINESS WIRE)-- Gramercy Property Trust (NYSE:GPT), a real estate investment trust, announced today that it launched a new joint venture to acquire, own and manage Class A distribution centers leased to leading e-commerce tenants on long-term leases across the country (the “Venture”). The Company is in discussions with several institutional capital partners and has reached an agreement with a sovereign investor to anchor the Venture. The Venture’s first acquisition is a forward purchase contract for $642 million. The Company expects to contribute between 25% and 50% of the equity to the Venture, estimated to be between $64 million and $128 million at target leverage levels. The Company expects to finance the initial acquisition with 55% to 60% property level mortgage debt.

The Venture’s first acquisition is a $642 million portfolio comprised of seven newly constructed Class A bulk distribution properties totaling 6.0 million square feet (the “Portfolio”) that are being acquired on a forward basis. The acquisition of the first four properties totaling $360 million is expected to occur during the fourth quarter of 2017. The second tranche of three properties totaling $282 million is expected to occur during the third quarter of 2018. Each building will be 100% leased to a leading e-commerce company. The separate leases all have an initial 15-year term with annual 1.75% to 2.00% rental escalations. The buildings are located in Dallas, TX, Inland Empire, CA (2), Jacksonville, FL, the New England I-95 Corridor, Southern NJ and Winchester, VA.

In connection with the acquisition of the Portfolio, the Company will be issuing between 2.7 million and 4.8 million OP Units to the seller as a component of the purchase price. The OP Units for the Portfolio will be priced at $29.19 per share and total between $80 million and $139 million at the current share price.

Britt Winterer, Managing Director and Head of the Company’s Build-to-Suit practice, stated, "We are excited to establish this new venture to target a very interesting opportunity in today’s industrial marketplace. The joint venture will allow us to capitalize on the growing demand for e-commerce distribution facilities across the United States and generate attractive risk adjusted returns for our public shareholders.”

A more detailed description of the transaction is outlined in a presentation posted on www.gptreit.com.

About Gramercy Property Trust

Gramercy Property Trust is a leading global investor and asset manager of commercial real estate. The Company specializes in acquiring and managing high quality, income producing commercial real estate leased to high quality tenants in major markets in the United States and Europe.

To review the Company’s latest news releases and other corporate documents, please visit the Company's website at www.gptreit.com or contact Investor Relations at 888-686-0112.

Gramercy Property Trust
Investor Relations
Ashley M. Mancuso, 888-686-0112

Source: Gramercy Property Trust