Equity Commonwealth, a REIT based in Chicago that was formed after an activist investor took control of the board of the former CommonWealth REIT in 2014, announced on Wednesday during an earnings call that it will be winding down its operations. This decision was made following pressure from stakeholders to pursue a controlled shutdown and return funds to investors.
According to president and CEO David Helfand, the company has been exploring potential investment opportunities with the goal of creating long-term value for shareholders. However, after reviewing their options, they were unable to secure any compelling transactions.
Helfand stated that by mid-September, Equity Commonwealth’s board plans to hold a shareholder vote approving their liquidation plan. The company has already initiated sales for three out of its four assets: 1250 H St. in Washington D.C., two office properties in Austin and one property at 1225 17th St. in Denver which will begin its sale process next month.
In March earlier this year Land & Buildings Investment Management began advocating for a wind-down as they noticed that despite holding $2 billion cash reserves,the REIT’s market value was only $2.2 billion.This sentiment has since been echoed by other investors such as Irenic Capital and Indaba Capital.
Following Equity Commonwealth’s investor call on Wednesday,Irenic released a statement commending both the board and management team “for making the difficult but necessary decision”to recommend liquidation.”We are pleased with this outcome,”they added subtly.Pictured is JLL’s photo courtesy showing off Washington DC’s own building located at1250 H Street
