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RNY Property Trust: Sell. Sell. Sell.

If Shareholders Sell, New Owners Could Take Properties Off the Market
October 10, 2017
560 White Plains Road in Westchester County.
560 White Plains Road in Westchester County.
RXR Realty, which survived a coup last month when shareholders in RNY Property Trust, its Australian-based U.S. office REIT, blocked an attempted takeover of the REIT, is now telling shareholders: sell your shares and sell them by tomorrow.

Sydney-based Aurora Funds Management, which unsuccessfully attempted to have itself replace RNY's current management, came back with an offer to purchase shares of RNY for $1.50 per share.

An RXR Realty affiliate issued a note to its shareholders telling them that Aurora's offer is more than what shareholders can expect to get from the distribution of any sales proceeds from its remaining U.S. properties.

"Any distribution from RNY is now considered unlikely to materially exceed this amount and it could be less, possibly zero," said RNY Australia Management Ltd. (RAML), the responsible entity of RNY Property Trust. "RAML must therefore recommend Aurora’s unconditional $1.50 bid price save for one reservation. The timing is such that unitholders have very little time to accept before the closing date (11 October 2017). This means that in order to benefit from Aurora’s $1.50 unconditional offer, unitholders will need to act urgently and diligently to ensure they accept (if they wish to) prior to the deadline."

In addition, RAML said RNY's two independent directors agreed to accept Aurora's bid.

As of last month, RNY Property Trust owned the majority interest in five properties: 55 Charles Lindbergh Blvd. on Long Island, 560 and 580 White Plains Rd. in Westchester County, and 6800 and 6900 Jericho Turnpike on Long Island.

RNY has been trying to sell the properties. However, based on indicative bids received to date, the REIT said there is no equity in the properties with their current debt levels. It intended to liquidate them nonetheless.

Aurora Funds Management has suggested to shareholders not to accept prices below the current asset value of the suburban New York assets. It argued the better strategy would be to hold off from selling any more of the buildings and instead fill available space and recapitalize the portfolio.

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