Annaly Capital Management, a New York–based mortgage debt real estate investment trust, agreed this week to purchase the portion of Crexus Investment Corporation that it doesn’t already own for $872 million.

Privately held Annaly currently owns 12.4 percent of Crexus, a separate REIT it launch in 2009 with a $230 million initial public offering and an eye toward investing in commercial real estate debt.
K&L Gates corporate partner Phillip Kardis II in Washington, D.C., advised Crexus on that IPO, which generated $600,000 in legal fees and expenses, according to an SEC filing by Annaly at the time.
Kardis is now part of a K&L Gates team advising Annaly on its proposed purchase of Crexus, which has a 45-day go-shop period to seek a better offer. Other K&L Gates lawyers working on the matter include corporate partner David Bernstein, tax of counsel Thomas Lyden, and associates Meredith Laitner and Lani Medina.
R. Nicholas Singh, a former partner at McKee Nelson ( which was absorbed in 2009 into Bingham McCutchen), serves as chief legal officer for Annaly, whose former CEO, Mike Farrell, made headlines last year for his $35 million pay package—a figure that topped the compensation earned by Wall Street executives like Jamie Dimon and Lloyd Blankfein. (Farrell, who built Annaly into the world’s largest mortgage REIT, died in October after being diagnosed with cancer.)
A special committee of Crexus’s board of directors retained Goodwin Procter last November to evaluate a takeover offer by Annaly. Bloomberg reports that Annaly’s proposed purchase of the company it founded is part of the REIT’s effort to expand and diversify its business after a decrease in yields on government-backed residential debt.
Gilbert Menna, cochair of Goodwin’s REITs and real estate capital markets group, is leading a team from the firm representing Crexus that also includes his fellow REIT cochair, Andrew Sucoff, corporate partner John Haggerty, tax partner H. Neal Sandford, and real estate partner Yoel Kranz.
Menna and Goodwin advised Cole Credit Property Trust II last month on its merger with Spirit Realty Capital. Reuters reports that the combination between the nontraded and public REITs will create a firm with a combined value of $7.1 billion.
The head of the National Association of Real Estate Investment Trusts told real estate publication CoStar Group last month that increased liquidity and capital availability could bode well for REITs in 2013. Robin Panovka, cohead of the real estate and REIT practice at Wachtell, Lipton, Rosen & Katz, seconded that notion in a recent interview with, although others who spoke with the website expressed somewhat more skepticism about the outlook for REITs this year.
Critics note that 2012 would have been an average year for REITs if not for the fourth-quarter announcement of Lehman Brothers’s $6.5 billion cash-and-stock sale of apartment owner and operator Archstone to a REIT–led investor group.
Goodwin was one of four Am Law 100 firms with roles on that transaction, and last month three other Am Law 100 firms were on hand for the $1.05 billion purchase of LNR Property by Starwood Property Trust, a REIT owned by real estate mogul Barry Sternlicht. CBS Corporation also announced last month that it would spin off its $1.8 billion Asian and European billboard business and convert its U.S. unit into a REIT.

January also saw the highest price paid for a U.S. office tower since 2010, as Greenberg Traurig and Skadden, Arps, Slate, Meagher & Flom landed roles on Sony’s $1.1 billion sale of its Manhattan headquarters, according to our previous reports.