ILPT Agrees to Acquire Monmouth Real Estate for $4B – REBusinessOnline

Share on linkedin
Share on facebook
Share on twitter
Share on email
Share on whatsapp

Monmouth

One of the properties that Monmouth Real Estate Investment Corp. owns is a 351,874-square-foot industrial property (pictured) in Dallas that FedEx Ground occupies.

NEWTON, MASS. AND HOLMDEL, N.J. — Industrial Logistics Properties Trust (ILPT) has agreed to acquire all the outstanding shares of Monmouth Real Estate Investment Corp. (NYSE: MNR) for $21 per share in an all-cash transaction valued at approximately $4 billion. The agreement includes the acquisition of $409 million of debt and all of Monmouth’s industrial properties.

The transaction is slated to close in the beginning of 2022. Under the agreement, ILPT will add Monmouth’s 126 Class A, single-tenant industrial properties totaling more than 26 million square feet to its portfolio. The Monmouth assets have an average remaining lease term of approximately eight years. The portfolio is over 80 percent leased to tenants that generate yearly rental revenue of $169.4 million.

ILPT cites geographic diversity and tenant diversity as benefits of the acquisition. Also, the merger will allow ILPT to improve its tenant base with renters such as Home Depot, Mercedes Benz and Ulta.

“This accretive transaction more than doubles the properties in ILPT’s mainland portfolio and this scale is expected to expand ILPT’s growth opportunities and access to capital, which we expect will drive cash flow growth and long-term value for our shareholders,” says John Murray, chief executive officer of ILPT.

In order to finance the acquisition, ILPT plans to enter a joint venture for equity investments of around $430 million to $1.3 billion. Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal advisor on bridge financing for ILPT.

Earlier this year, Equity Commonwealth (NYSE: EQC) agreed to acquire Monmouth for $3.4 billion. The combined company was expected to have a pro forma equity market capitalization of about $5.5 billion. However, Monmouth’s shareholders turned down the offer to hold out for a higher bid.

“Today’s announcement is the result of an exhaustive strategic review process in which the highest bid prevailed,” says Brian Haimm, the lead independent director of Monmouth’s board. “The entire board unanimously believes this transaction delivers compelling value to our shareholders and recognizes the value of Monmouth’s high-quality logistics portfolio.”

J.P. Morgan Securities LLC and CS Capital Advisors LLC are the financial advisors for Monmouth, while Wachtell, Lipton, Rosen & Katz and Stroock & Stroock & Lavan LLP are the legal advisors for Monmouth. Citigroup acted as the exclusive financial advisor for ILPT. Hunton Andrews Kurth LLP is serving as legal advisor for ILPT.

ILPT is a Newton-based real estate investment trust (REIT) managed by The RMR Group. ILPT owns over 290 properties totaling approximately 36 million rentable square feet. This month, ILPT acquired three industrial properties in the Memphis-area for $100 million. The three properties had a total of 1.3 million square feet combined and were located at 481 Airport Industrial Drive in Southaven, 8474 Market Place Drive in Southaven and 6380 E. Holmes Road in Memphis.

Monmouth Real Estate Investment Corp. is a Holmdel-based REIT. The company specializes in single-tenant, net-leased industrial properties.

— Julia Sanders

Share on linkedin
Share on facebook
Share on twitter
Share on email
Share on whatsapp