City Office REIT’s sale to MCME Carell for $1.1 billion including debt has been completed, the buyer announced.

The Vancouver-based REIT has become a private company and its shares have been delisted from the New York Stock Exchange.

City Office owned and operated office properties located primarily in U.S. Sunbelt markets. The former REIT had a controlling interest in 5.4 million square feet of office assets.

Grand Prairie, Texas-based MCME Carell is an affiliate of multi-strategy Elliott Investment Management and Morning Calm Management, which are headquartered in West Palm Beach, Fla., and Boca Raton, Fla., respectively.

Under the terms of the agreement, MCME Carell Holdings LP and MCME Carell Holdings LLP acquired all issued and outstanding shares of City Office REIT, other than those already owned by the buyer or its affiliates, for US$7 per share in cash. The price represents a 26% premium to the company’s closing share price on the NYSE prior to the announcement and a 39% premium to the 90-day volume-weighted average.

“This outcome, with over 98% of voting stockholders supporting the acquisition, reinforces the merits of the transaction and speaks to the hard work our team has done throughout this process,” said James Farrar, CEO of City Office.

When the sale agreement was announced last summer, he said it provided immediate and significant value to unitholders in light of the office sector’s challenge. He offered similar sentiments after the deal’s completion, without referring to the sector’s challenges that are now starting to ease.

“This investment furthers our partnership with Elliott to pursue opportunities in the US commercial real estate space and underscores our partnership’s continued belief in the recovery of the office sector,” said Mukang Cho, Morning Calm’s CEO. “We expect to continue to invest in high-quality commercial real estate assets where we see value resulting from the dislocation of the broader sector.”

Raymond James & Associates and Jones Lang LaSalle Securities acted as City Office’s financial advisors. DLA Piper LLP, with a deal team led by Partners Chris Giordano and Jon Venick, and Associate Nick Young, served as M&A counsel; and Hogan Lovells LLP acted as corporate counsel. Eastdil Secured advised the buyer, and Gibson Dunn & Crutcher LLP provided legal counsel.

Photo: City Office REIT