Through John jannarone
Colony Capital (ticker: CLNY) is considering selling its industrial real estate unit, according to a Bloomberg report on Wednesday, news that comes less than a week after CorpGov released analysis showing the company could be worth more if it was broken. up or sold outright.
The asset, which is structured like a real estate investment trust (REIT), could bring in more than $ 5 billion, Bloomberg said, citing people familiar with the matter. A representative for Colony Capital declined to comment on CorpGov.
Last week, CorpGov released a detailed financial analysis that included a coin valuation sum indicating that the company could be worth more than $ 11 per share if split into individual pieces. The report also explained that the presence of activist Blackwells Capital could be a catalyst for the company to take action after a troubled merger in 2017 triggered a dramatic drop in Colony’s share price.
Colony owns 34% of the industrial REIT which would be for sale. Such industrial space is in high demand, as companies increasingly seek warehouses for goods that are stored and shipped directly to consumers – the so-called Amazon effect. In June, Blackstone spent $ 18.7 on such assets in one of its largest deals ever, with observers estimating a cap rate of between 4% and 5%.
Assuming a 4.5% cap rate and increased revenues from a recently announced deal, the industrial REIT could have an enterprise value of $ 6 billion with Colony’s equity of $ 1.00. $ 2 billion or $ 1.69 per share.
John jannarone, Editor-in-Chief