Winthrop Realty Trust is embarking on a two-year plan to liquidate its interests in a $869 million portfolio containing 5.3 million square feet of rentable space
and 6,204 apartment units, as well loan assets totaling $58 million and cash and cash equivalents of $103 million.
The Boston-based REIT’s board approved the plan of liquidation and it will now go to shareholders for a vote.
Several factors, some negative some positive, contributed to the decision to liquidate, the company said. The continued disparity between Winthrop's common share price and the estimated net asset value of its property investments, coupled with the inability to raise additional capital at prices that are accretive to existing shareholders were certainly negative factors.
However, the current strong demand for real estate assets and the annual disposition limitations imposed on REITs for federal tax purposes were also factors. The REIT also cited a diminished flow of opportunistic investments and the price level of offers and indications of interest from investors interested in acquiring Winthrop as a whole.
"We have observed very favorable market conditions which have driven up the value for stabilized real estate,” said Carolyn Tiffany, president of Winthrop Realty. “As value investors, we view this market as an opportune time to realize gains on our investments.”
If the plan of liquidation is approved by the common shareholders, Winthrop will seek to sell all of its assets within a two year period.
In the first quarter of this year, Winthrop Realty Trust reported a net loss of $2.2 million compared to net income of $11 for the same period a year ago. The lost was attributed to non-cash impairments related to the plan of liquidation by Winthrop’s Board of Trustees.
During the first quarter, Winthrop completed a number of sales of operating assets including four buildings and a $110 million in loans. In addition, it has two properties under contract one in Amherst, NY, and another in Jacksonville, FL. Its current holdings also include the following properties:
A nine-story, 187,000-square-foot Class B office building in Cerritos, CA.
126,000 square feet of retail and office space consisting of the first six floors of a mixed-use building and 208 parking spaces in Chicago;Two 118,000-square-foot office buildings referred to as the Crossroads I and II at Meridian, in Englewood, CO
A multi-tenanted office buildings in Lisle, IL, containing 169,000 square feet;
A 54,000-square-foot office property net leased to Fairpoint Communications Inc., in Burlington, VT;
A 320 unit multifamily property in Memphis, TN, known as Waterford Place; and
A 284 unit multi-family property in Greensboro, NC.