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A Dallas real estate investor is merging with an Atlanta commercial property firm in a deal that will create a combined $7.8 billion company.
Cousins Properties and Dallas-based Tier REIT said they are merging in an all stock transaction.
Together the two firms own more than 21 million square feet of office space in the Southeast and Southwest.
Tier REIT owns several high-profile North Texas office buildings include the Legacy Union tower in West Plano and downtown Fort Worth’s 40-story Burnett Plaza.
Cousins is a long-time player in the Dallas-Fort Worth property market and has a stake in the Victory Park development.
Both companies are real estate investment trusts.
"The combination of these two highly complementary companies creates the preeminent Sun Belt office REIT with a best-in-class balance sheet," Colin Connolly, president and chief executive officer of Cousins said in a statement. "The company will own an unmatched portfolio of trophy office properties in the premier submarkets of Atlanta, Austin, Charlotte, Dallas, Phoenix and Tampa.
"In addition, the company will be uniquely positioned to drive superior value for shareholders through its highly pre-leased existing development pipeline and well-located strategic land holdings for future development."
Tier REIT owns sites for two office towers in Plano’s Legacy business park. And Cousins has plans for an office high-rise in Victory Park. The company also owns buildings in Austin and Houston.
"This transaction will be transformative for both companies," said Scott Fordham, Chief Executive Officer of Tier. "The alignment of high-quality properties and common geographic footprint in our respective portfolios will offer shareholders the opportunity to benefit from a truly differentiated Sun Belt focused office platform.
"In addition, with an enhanced balance sheet, our shareholders will be able to benefit from further value creation in Austin, Dallas and Atlanta with Tier’s pipeline of over 5 million square feet of development and redevelopment opportunities."
Cousins under terms of the merger will give Tier shareholders 2.98 shares of newly issued stock in exchange for each of their shares.
Cousins shareholders will have about 72 percent of the holdings when the merger is completed. The transaction is expected to close in the third quarter.
Tier REIT owns the 5950 Sherry Lane building in Dallas.