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Israeli Firm Buying 45% Stake in DC Office Owner; Will Convert it to a REIT

Office Building Developer and Owner Carr Properties Planning Return to Public Markets as a REIT Following Investment
May 8, 2013
Alony Hetz, an Israeli real estate investment company, has agreed to acquire a 45% equity stake in Washington, DC, office building developer and owner Carr Properties, acquiring the stake currently held by the Special Situation Property Fund of JP Morgan Chase Bank ("SSPF") and others.

Alony Hetz will invest $300 million in the entity acquiring the stake and will be allocated a nearly 50% rights in the acquiring company -- an identical percentage to SSPF holdings currently.

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Carr is a real estate investment company focused on acquisitions, development and property management of commercial office properties in the greater Washington area. Carr's management team has many years of experience and is led by president and COO Oliver T. Carr III.

The company has interests in commercial office properties valued at more than $1 billion, including twenty-one existing office properties and two major development properties, 1700 New York Avenue in Washington, DC, and 4500 East West Highway in Bethesda, MD.

Carr Properties was formed in March 2007 as the successor to Columbia Equity Trust, Inc., a NYSE-listed office REIT that was acquired by a commingled fund of institutional investors advised by J.P. Morgan Asset Management through a merger transaction.

Columbia itself was the successor to Carr Capital Corp., a privately held company formed by the senior management of Columbia in 1994.

Based on Carr's business plan, it expects to put the new equity to work building the company, via acquisition and development of additional real estate, to a property value at $1.5 billion over the next several years, focusing on investing in the office sector in the greater Washington D.C. metropolitan area.

In addition, the companies expect Carr Properties will eventually become a real estate investment trust (REIT). The company plans a rate of annual dividend yield of 6% over the next few years. Alony Hetz and Carr Properties said the transaction will close in the third quarter of this year.

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