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”), a global Investment and asset management company with a focus on real estate.
The transaction is valued at $ 2.33 billion and represents essentially all of the assets that comprise the company’s commercial real estate business, including equity interests, 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.
“Commercial real estate has been an important part of Annaly’s differentiated investment model since 2013,” said David Finkelstein, Annaly’s chief executive officer and chief investment officer. “This transaction provides a compelling execution for our shareholders and will create additional capacity to further develop our leadership and operational capabilities in all aspects of the residential mortgage finance market, which 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, including 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 property sold and to purposefully acquire assets in accordance with its capital allocation policy, investing in agency assets such as residential and corporate loan assets. 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 be completed by 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 acting as financial advisor and Goodwin Procter LLP and McCarthy Tétrault LLP are acting as legal advisor to Slate.
Annaly is a leading diversified capital manager that invests in and finances residential and commercial real estate. Annaly’s primary business objective is to generate net income for distribution to its shareholders and to optimize their returns through prudent management of their diversified investment strategies. Annaly is internally managed 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.
About 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 significant sponsor of all of its private and publicly traded investment vehicles that are tailored to meet the unique goals of its investors. The company’s careful and selective investment approach creates long-term value with an emphasis on capital preservation and above-average returns. Slate is backed by an exceptional staff, flexible capital, and a proven ability to create 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 certain forward-looking statements that are based on various assumptions (some of which are beyond our control) and may be changed by reference to one or more future periods or by use of forward-looking terminology such as “may” “,” will “,” believe “,” expect “,” anticipate “,” continue “or similar terms or variations of these terms or the negation of these terms. Actual results could differ materially from those in forward-looking statements due to a variety of factors including, but not limited to, risks and uncertainties related to the COVID-19 pandemic, including in relation to adverse economic conditions for property-related assets and Financing conditions; Changes in interest rates; Changes in the yield curve; Changes in prepayment rates; the availability of mortgage-backed securities and other securities for purchase; the availability of funding and, if available, the terms of any funding; Changes in the market value of our assets; Changes in business conditions and the 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 credit transfer securities, mortgage-backed securities and related assets for residential mortgages, commercial real estate and corporate bonds; Risks associated with investing in mortgage service rights; our ability to pursue all of the 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 our key most recent annual report on Form 10-K and all subsequent quarterly reports on Form 10-Q . We make no undertaking, and expressly disclaim any obligation, to publicly release the result of changes to any forward-looking statement to reflect the occurrence of expected or unexpected events or circumstances after the date of such statements, unless required by law.