REIT sells $1.7b portfolio.

The current level of pricing for commercial office properties is so good, even REITs are getting the idea that now may be the right time to cash in their chips.

In a deal announced this week, public office REIT, CRT Properties, is selling its portfolio of 137 office buildings for $1.7 billion to DRA Advisors, a manager of real estate investment funds for institutional and private investors.

The sale price for the group of assets, which are located in major metropolitan areas across the United States, amounted to a $27.80 offering per share, 15.4% higher than what CRT stock was trading for just before the transaction.

The sale price wasn't CRT's only consideration in selecting the winning bid. The REIT put a high premium on the buyer's ability to close the sale and wouldn't accept conditions in the merger agreement that could be potential logjams.

Bidders consequently had to conduct their due diligence while structuring a commercially competitive merger agreement; a process that lawyers working on the deal called tricky and work intensive.

"It was a very intense bidding process," said Martin Luskin, senior partner in law firm Blank Rome's real estate group, who helped structure the deal for DRA.

After the exchange to private ownership, the portfolio of assets will no longer be managed by CRT personnel. Directors of that company have not yet announced future plans for the firm.

DRA's acquisition comes as part of what seems to be an aggressive growth strategy for the firm's funds within the last year. At the end of 2004, PL Retail LLC, which is a joint venture between DRA and Kimco Realty Corporation, executed a merger with Price Legacy Corporation, a publicly traded shopping center REIT.

CRT isn't the only REIT to recently unload its holdings. In early June, industrial REIT giant Catellus sold its vast portfolio of land, warehouses and distribution centers to fellow REIT ProLogis for $3.6 billion.

That purchase made ProLogis the biggest industrial REIT in the world with over 350 million s/f in over 2,250 facilities owned, managed and under development in the United States, Europe and Asia. Catellus also has a large cache of well-placed developable land.