PIMCO Acquires Columbia Property Trust For $3.9B

The real estate investment trust Columbia Property Trust Inc. CXP has been acquired for $3.9 billion by acquired by funds managed by Pacific Investment Management Company LLC (PIMCO), which plans to take the company private.

What Happened: Columbia Property has an office portfolio of 15 properties spread across four markets — Boston, New York, San Francisco and Washington, D.C. — which contains more than 6 million rentable square feet. The company also has four properties under development and more than 8 million square feet under management for private investors and third parties.

PIMCO will acquire all of the outstanding shares of Columbia common stock for $19.30 per share in cash, which the company said represented a premium of approximately 27% over Columbia’s unaffected closing share price on March 12.

The transaction is expected to close as early as year-end. Columbia shareholders will receive a previously announced third-quarter dividend of 21 cents per share payable on Sept. 15, which will also be the final quarterly dividend payment during the pendency of the transaction.

Columbia will release its third-quarter earnings report but will not hold a conference call to comment on the report.

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Why It Happened: John Murray, PIMCO’s global head of private commercial real estate, voiced his support for the office sector as a post-pandemic growth opportunity.

“We continue to believe that high-quality office buildings in major U.S. cities offer long-term value for our clients and Columbia has assembled a modernized, well-located portfolio of assets that we expect will perform well in the years ahead,” said Murray.

Constance Moore, chairwoman of the Columbia board of directors, added that the acquisition “provides Columbia shareholders with immediate and certain cash value at a significant premium to the company’s public market valuation, and we are confident it represents the best outcome for all Columbia shareholders.”

CXP Price Action: Columbia Property Trust shares are trading higher by 15% to $19.06 ar publication time.

Photo: Market Square, one of Columbia Property Trust's office developments in Washington, D.C.; photo courtesy of the company.