Equity Commonwealth Will Pursue Liquidation Following Investor Pressure

Equity Commonwealth, the Chicago-based REIT that resulted from an activist investor takeover of the board of the former CommonWealth REIT in 2014, will wind down operations, president and CEO David Helfand said Wednesday on an earnings call. The decision to liquidate came after stakeholders called on the board to pursue an orderly shutdown and return cash to investors.

“We have been evaluating potential investment opportunities in an effort to create long-term value for shareholders,” Helfand said Wednesday. “After working through our pipeline, we have been unable to consummate a compelling transaction.”

By mid-September, Helfand said, the Equity Commonwealth board expects to call for a shareholder vote to approve a liquidation plan. The company has already begun the sale process for three of its four assets, including 1250 H St. in Washington, DC and two Austin office properties. The sale process for 1225 17th St. in Denver will also begin in September.

Activist investor Land & Buildings Investment Management began calling for a wind-down this past March, noting that the REIT’s $2-billion market value was less than the $2.2 billion of cash it holds. More recently, Irenic Capital and Indaba Capital made similar calls.

In a statement following Equity Commonwealth’s investor call Wednesday, Irenic commended the REIT’s board and management team “for making the difficult but correct decision to recommend a liquidation. At the risk of being too subtle: we’re pleased.”

Pictured: 1250 H St. in Washington, DC. Photo courtesy of JLL.