Annaly Capital Management, Inc. Announces Agreement to Sell Its Commercial Real Estate Business to Slate Asset Management for $2.33 Billion
NEW YORK–(BUSINESS WIRE) – Annaly Capital Management, Inc. (NYSE: NLY) (“Annaly” or the “Company”) announced today that it has entered into a definitive agreement to sell its commercial real estate business to Slate Asset Management LP (“Slate”) Has. ), a global investment and asset management firm focused on real estate.
The transaction is valued at $ 2.33 billion and represents essentially all of the assets of the company’s commercial real estate business, including equity investments, loan assets and commercial mortgage-backed securities. Certain Annaly employees who primarily support the commercial real estate business are expected to join Slate after the sale is complete, including Timothy Gallagher, Head of Commercial Real Estate and Michael Quinn, Head of Commercial Investments.
“The commercial real estate business has been an important part of Annaly’s differentiated investment model since 2013,” noted David Finkelstein, Annaly’s chief executive officer and chief investment officer. “This transaction provides our shareholders with compelling execution and provides additional capacity to further develop our leadership and operational skills in all aspects of the residential mortgage finance market. This has been the cornerstone of Annaly’s strategy since our inception. On behalf of our entire company and the Board of Directors, I would like to sincerely thank everyone who has supported and built our commercial real estate business over the years. ”
Annaly believes the transaction will have a negligible impact on key financial metrics such as book value, core earnings and dividends for the company. Upon completion of the transaction, the Company intends to use the proceeds from the sale to repay its financing facilities related to the commercial real estate assets sold and to purchase target assets in accordance with its capital allocation policy, which may include investments in agency assets, residential and corporate loans. Annaly expects to maintain limited exposure to the commercial real estate sector through opportunistic and efficient strategies within the securities portfolio.
Subject to customary closing conditions, including applicable government approvals, the commercial real estate business transfer is expected to complete in the third quarter of 2021.
Evercore is acting as financial advisor and Ropes & Gray LLP is acting as legal advisor to Annaly. BMO Capital Markets is serving as financial advisor and Goodwin Procter LLP and McCarthy Tétrault LLP are serving as legal advisor to Slate.
Annaly is a leading diversified capital manager that invests in and finances residential and commercial real estate. Annaly’s main business objective is to generate a net profit for distribution to shareholders and to optimize returns through prudent management of diversified investment strategies. Annaly is managed in-house and has chosen to be taxed as a Real Estate Investment Trust (REIT) for federal income tax purposes. More information about the company can be found at www.annaly.com.
Information on Slate Asset Management
Slate Asset Management is a leading real estate-focused alternative investment platform with approximately $ 6.5 billion in assets under management. Slate is a value manager and a major sponsor of all of its private and publicly traded investment vehicles that are tailored to meet the unique objectives of its investors. The company’s careful and selective investment approach creates long-term value with an emphasis on capital preservation and oversized returns. Slate is backed by an exceptional workforce, flexible capital, and a proven ability to develop and execute a wide range of compelling investment opportunities. Visit slateam.com to learn more.
This press release and our public documents to which we refer contain or contain references to certain forward-looking statements that are based on various assumptions (some of which are beyond our control) and that may be identified by reference to, or ahead of, a future period or periods the use of forward-looking terminology such as “may”, “will”, “believe”, “expect”, “anticipate”, “continue” or similar terms or variations of these terms or the negative of these terms. Actual results could differ materially from those expressed in forward-looking statements due to a number of factors including, but not limited to, risks and uncertainties related to the COVID-19 pandemic, including those related to adverse real estate economic conditions. related assets and funding terms; Changes in interest rates; Changes in the yield curve; Changes in prepayment rates; the availability of mortgage-backed securities and other securities for sale; the availability of funding and, if available, the terms of funding; Changes in the market value of our assets; Changes in business conditions and general economy; our ability to grow our commercial real estate business; our ability to grow our home loan business; our ability to grow our medium-sized lending business; Credit risks associated with our investments in security transfer papers, residential mortgage-backed securities and related mortgage loans for residential real estate, commercial real estate and corporate debt; Risks associated with investing in mortgage service rights; our ability to take advantage of all investment opportunities considered; Changes in government regulations or policies that affect our business; our ability to maintain our qualification as a REIT for US federal income tax purposes; and our ability to maintain our exemption from registration under the Investment Company Act of 1940. For a discussion of the risks and uncertainties that could cause actual results to differ from those contained in the forward-looking statements, see “Risk Factors” in the current Annual Report on Form 10-K and all subsequent quarterly reports on Form 10-Q. We do not undertake and expressly disclaim any obligation to publicly announce the result of changes that may be made in any forward-looking statement to reflect the occurrence of expected or unexpected events or circumstances after the date of such statements, unless this is required by law.