10-K 1 gpt-123115x10k.htm 10-K 10-K


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 FORM 10-K 
ý
 
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
For the fiscal year ended December 31, 2015
or
 
¨
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
For the transition period from . to .
Commission File No. 1-35933
 
GRAMERCY PROPERTY TRUST
(Exact name of registrant as specified in its charter)
 
Maryland
 
56-2466617
(State or other jurisdiction
incorporation or organization)
 
(I.R.S. Employer of
Identification No.)
 
 
 
521 5th Avenue, 30th Floor, New York, NY 10175
(Address of principal executive offices – zip code)

 
(212) 297-1000
(Registrant’s telephone number, including area code)

 
Chambers Street Properties
47 Hulfish Street, Suite 210, Princeton, New Jersey 08542
(Former name, former address and former fiscal year, if changed since last report)
 
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
 
Title of Each Class
 
Name of Each Exchange on Which Registered
Common Shares, $0.01 Par Value
Series A Cumulative Redeemable
Preferred Shares, $0.01 Par Value
 
New York Stock Exchange

New York Stock Exchange
 
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x      No ¨
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨      No x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x      No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x      No ¨
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a small reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “small reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer x
Accelerated filer ¨
Non-accelerated filer ¨
Smaller reporting company ¨
 
 
(Do not check if a smaller reporting company)
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨     No x
As of February 25, 2016, the Registrant had 421,011,239 common shares outstanding. The aggregate market value of common shares held by non-affiliates of the registrant (235,498,633 shares) at June 30, 2015, was $1,872,214,132. The aggregate market value was calculated by using the closing price of the common shares as of that date on the New York Stock Exchange, which was $7.95 per share.
 
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant’s Definitive Proxy Statement for its 2016 Annual Meeting of Shareholders expected to be filed within 120 days after the close of the registrant’s fiscal year are incorporated by reference into Part III of this Annual Report on Form 10-K.





GRAMERCY PROPERTY TRUST
(F/K/A CHAMBERS STREET PROPERTIES)
FORM 10-K
TABLE OF CONTENTS
10-K PART AND ITEM NO.
 
Page
PART I
 
PART II
 
PART III
 
PART IV
 
 


2



Part I
ITEM 1.
BUSINESS 
General
Gramercy Property Trust, or the Company or Gramercy, a Maryland real estate investment trust, or REIT, is a leading global investor and asset manager of commercial real estate. We specialize in acquiring and managing single-tenant, net leased industrial, office, and specialty properties. We focus on income producing properties leased to high quality tenants in major markets in the United States and Europe.
We earn revenues primarily through three sources: (i) rental revenues on properties that we own in the United States, (ii) asset management revenues on properties owned by third parties in the United States and Europe and (iii) pro-rata rental revenues on our unconsolidated equity investments in the United States, Europe, and Asia.
As of December 31, 2015, our wholly-owned portfolio had the following characteristics:
98% occupancy;
A weighted average remaining lease term of 7.54 years (based on annual base rent);
42% investment grade tenancy (based on annual base rent);
Industrial portfolio comprised of 32.9 million aggregate rentable square feet with an average base rent per square foot of $5.46 (based on annual base rent);
Office portfolio comprised of 12.0 million aggregate rentable square feet with an average base rent per square foot of $20.28 (based on annual base rent);
Specialty industrial portfolio of 14 properties comprised of 676 thousand aggregate rentable square feet of building space that we lease to trucking companies, a car auction services company, a bus depot, a rental car company, and salvage yards;
Specialty retail portfolio comprised of 1.2 million aggregate rentable square feet with an average base rent per square foot of $15.08 (based on annual base rent);
Data center portfolio comprised of 228 thousand aggregate rentable square feet with an average base rent per square foot of $30.50 (based on annual base rent); and
Top five tenants by annualized base rent include Bank of America, N.A. (8%), Healthy Way of Life II, LLC (d.b.a Life Time Fitness) (4%), Raytheon Company (3%), Amazon.com, Inc. (2%), and JPMorgan Chase Bank, N.A. (2%). Each of the top five tenant leases is guaranteed by the respective tenant’s parent company.    
As of December 31, 2015, our unconsolidated equity investment portfolio of industrial and office properties comprised of an aggregate 16.7 million rentable square feet with an average base rent per square foot of $10.69 (based on annual base rent).
Significant 2015 Activities
Merger of Chambers and Legacy Gramercy
On December 17, 2015, Chambers Street Properties, or Chambers, a Maryland REIT, completed a merger, or the Merger, with Gramercy Property Trust Inc., or Legacy Gramercy, a Maryland corporation, pursuant to which Legacy Gramercy shareholders received 3.1898 common shares of beneficial interest of Chambers for each share of common stock of Legacy Gramercy held. Following the Merger, Chambers changed its name to “Gramercy Property Trust” and began trading on the New York Stock Exchange, or NYSE, using the “GPT” stock symbol. Legacy Gramercy’s executive management team manages the combined company.
In the Merger, Chambers was the legal acquirer but Legacy Gramercy was determined to be the “accounting acquirer” for financial reporting purposes. Thus, the financial information set forth herein reflects the results of Legacy Gramercy only through December 17, 2015 and 14 days of combined company results following the Merger closing. For this reason, period to period comparisons may not be meaningful.

3



The Merger enabled us to accelerate the achievement of many of our strategic goals including:
Increased size and scale with the addition of 104 wholly-owned properties, including 60 industrial properties and 44 office properties, which comprise an aggregate 25.0 million square feet and the addition of four unconsolidated equity investments, through which we own interests in 27 properties which comprise an aggregate 16.7 million square feet in the United States, Europe and Asia;
Broader tenant diversification with largest tenant representing approximately eight percent of annualized base rent and the top ten tenants representing less than 28% of total annualized base rent;
Broader geographic footprint and diversity in attractive markets;
Achieved investment grade credit ratings of Baa3 from Moody’s Investors Service and BBB- from Standard and Poor’s Ratings Service, both ratings with a stable outlook;
Improved access to financing including a new $850.0 million senior unsecured revolving credit facility, $300.0 million three-year term loan, $750.0 million five-year unsecured term loan, and $175.0 million seven-year unsecured term loan;
Access to the bond market including a private placement of $150.0 million in senior unsecured notes with a fixed interest rate of 4.97% and maturity in December 2024;
Lower operating cost structure on a combined basis;
Facilitates the expansion of our Gramercy Property Europe plc, or Gramercy European Property Fund platform;
Increased liquidity for shareholders due to the increased equity capitalization of the company and a larger shareholder base;
In addition to the Merger, we also achieved a number of milestones with our operating activities:
Expanded High-Quality Net Leased Portfolio
In 2015, we acquired 54 properties aggregating approximately 8.8 million square feet in 21 separate transactions for a total purchase price of approximately $1.1 billion, excluding the acquisition of 104 properties in connection with the Merger with Chambers, which is described further in Note 3 of the accompanying financial statements.
In 2015, we sold seven properties aggregating approximately 398 thousand square feet for net proceeds of approximately $85.5 million.
Developed European Operations
In 2015, through the Gramercy European Property Fund, a private real estate investment fund we formed in December 2014 with several equity investment partners that targets single-tenant industrial, office and specialty retail assets throughout Europe, we acquired 12 properties in Europe aggregating approximately 3.5 million square feet in eight separate transactions for a total purchase price of approximately $243.0 million, of which our pro-rata share represented approximately $48.1 million. As of December 31, 2015, our total funding to Europe was $25.7 million.
Corporate Structure
We were formed as a Maryland REIT in March 2004 and commenced operations in July 2004 following an initial private placement of our common shares. In May 2013, we listed our common shares on the NYSE under the symbol “CSG.” Following the Merger in December 2015, we changed our NYSE trading symbol to “GPT.”
Our operating partnership, GPT Operating Partnership LP, or the Operating Partnership, indirectly owns (i) all of our consolidated real estate investments, (ii) our interests in unconsolidated investments and (iii) the entities, primarily a taxable REIT subsidiary, or TRS, that conduct our third-party asset management operations. We are the sole general partner and 100% owner of the Operating Partnership. The Operating Partnership is the 100% owner of all of its direct and indirect subsidiaries, except that as of December 31, 2015 third-party holders of limited partnership interests in Legacy Gramercy’s operating partnership, the entity that owns substantially all of Legacy Gramercy’s assets and investments, owned approximately 0.33% of the beneficial interests of the Company.

4



We have elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, or the Internal Revenue Code, and generally will not be subject to U.S. federal income taxes to the extent we timely distribute our taxable income, if any, to our shareholders. We have in the past established, and may in the future establish, TRSs, to effect various taxable transactions. Those TRSs would incur U.S. federal, state and local taxes on the taxable income from their activities.
Unless the context requires otherwise, all references to “Company,” “Gramercy,” “we,” “our” and “us” mean Legacy Gramercy and one or more of its subsidiaries for periods prior to the Merger closing and Gramercy Property Trust and one or more of its subsidiaries for periods following the Merger closing.
Our Investment Strategy – United States
We seek to acquire and manage a diversified portfolio of high quality net leased properties that generates stable, predictable cash flows and protects investor capital over a long investment horizon. We expect that the majority of these properties will be leased to a single tenant. Under a net lease, the tenant typically bears the responsibility for all property-related expenses such as real estate taxes, insurance, and repair and maintenance costs. We believe this lease structure provides an owner cash flows over the term of the lease that are more stable and predictable than other forms of leases and minimizes the ongoing capital expenditures often required with other property types.
We approach the net leased market as a value investor, looking to identify and acquire net leased properties that we believe offer attractive risk adjusted returns throughout market cycles. We focus primarily on industrial and office properties, where we believe attractive investment opportunities currently exist. We focus on acquiring assets in major markets where strong demographic and economic growth offer, in our view, a higher probability of producing long-term rent growth and/or capital appreciation. Our goal is to continue to grow our existing portfolio and become a preeminent owner of net leased commercial industrial and office properties.
We believe that within the net leased industry, industrial and office investments offer a fundamentally different opportunity from the market for net leased retail assets. Industrial and office assets tend to be heterogeneous, and valuation is frequently influenced by local real estate market conditions and tenant preferences. In our view, the skillset required to properly underwrite industrial and office assets is specific to those assets and can be used to generate significant investment outperformance. We also believe that well-located industrial and office assets are better positioned to experience rent growth in an inflationary environment and asset price appreciation than single tenant retail assets.

5



Focus on Industrial Properties
Our strategy is to focus primarily on industrial properties and to pursue office properties on a more opportunistic basis. We believe industrial properties offer the most compelling risk adjusted returns in the net leased marketplace today. In our experience, industrial assets have more stable tenancy and a more direct and critical relationship to the tenant’s underlying operations. Industrial assets also have lower carrying costs when vacant, lower re-leasing costs to replace tenants and lower ongoing capital requirements during the period of ownership.
We do not plan to focus on net leased retail assets. We believe that there are many large, well-capitalized net leased REITs that currently focus on retail assets and we believe that the market for these assets is currently the most competitive within the overall net leased marketplace. In addition, retail leases typically have minimal rent increases, and many renewal options at fixed rents, which gives the tenant much of the benefit of any market or rent appreciation through an increase in the leasehold value of the asset. If specific opportunities arise or market conditions warrant, we may revisit this approach to net leased retail assets in the future.
Focus on Reducing Office Exposure and Repositioning the Portfolio
Subsequent to the merger with Chambers, we plan to reduce overall exposure to office properties through the disposition of select single and multi-tenant office assets. We expect to reinvest those proceeds into target industrial and to a lesser extent, specialty assets. Our current goal is to reduce office exposure to less than 25% as measured by portfolio annual base rent.
Focus on Real Estate Fundamentals
We have observed that the net leased investing marketplace has evolved from a primarily credit-focused strategy with bond type net leased structures, long lease terms, and bargain renewal options to one in which net leased investors face many of the same operational and market risks as other real estate investors. For this reason, we believe that real estate underwriting is an important aspect of our investment process. We believe that traditional real estate fundamentals will be the primary driver of investment performance in the net leased market for the foreseeable future, in contrast to the past practices where long lease terms and tenant credit quality were the primary drivers.
Target Markets with Attractive Characteristics — We plan to concentrate our investment activity in select target markets with the following characteristics: high quality infrastructure, diversified local economies with multiple economic drivers, strong demographics, pro-business local governments and high quality local labor pools. We believe that these markets offer a higher probability of producing long-term rent growth and/or capital appreciation. As of December 31, 2015, approximately 88% of our portfolio (based on annual base rent) is located in our target markets.
Properties with Contract Rents that are Competitive with Market Rents — We target properties with contract rents that are competitive with rents for similar properties in the market as a way to reduce the volatility of cash flows that can occur upon the expiration of a lease.
Properties with Long Lease Terms —We generally target properties that have between five and 20 years of non-cancelable lease terms. We believe that longer lease terms provide more stable cash flows, are less susceptible to short term changes in market conditions and require less capital expenditures to maintain tenancy.
Core Properties Acquired at Above Market Yields Due to Some Market Inefficiency — We seek opportunities to acquire core properties at attractive prices due to a mispricing of credit or real estate risk, or a misunderstanding of the nature of the investment that may limit the competitive environment.
Complex Legacy Net Leased Portfolios — We seek opportunities to acquire legacy net leased portfolios that through asset sales, lease restructurings and other value-add activities can be transformed into high quality net leased portfolios.
Target Mission Critical Non-Traditional Net Leased Properties
We target specialized properties that fall outside many traditional institutional investor parameters, but offer unique utility to a tenant or an industry and can therefore be acquired at attractive yields relative to the underlying risk. We look for properties that are difficult or costly to replicate due to a specific location, special zoning, unique physical attributes, below market rents or a significant tenant investment in the facility, all of which contribute to a higher probability of tenant renewals. Examples of specialized properties include cross-dock truck terminals, cold storage facilities, parking facilities, air-freight facilities, steel distribution facilities, properties with high parking requirements and other mission critical facilities. We purchase specialized corporate real estate if we believe the property is critical to the ongoing operations of the tenant and the profitable continuation of its business. We believe that the profitability of the operations and the relative difficulty in replicating or moving operations reflect the importance of the property to the tenant’s business.

6



Target Transactions Where We Have a Competitive Advantage
Individual Properties — We seek to acquire individual properties having a purchase price between $10.0 million and $100.0 million. We target properties of this size because we find in the current environment that there is less competition from larger institutions who generally look for larger properties and larger portfolios. We have an asset management team of significant scale that has significant experience negotiating, underwriting and acquiring these types of properties, which we believe gives us a competitive advantage over many local and regional investors that typically compete for these acquisitions.
Sale Leasebacks — We believe our management team is among the most experienced and well known in the sale leaseback industry, with long-standing contacts and reputations among bankers, advisors and private equity firms. We believe that we can source and effectively compete on sale leaseback transactions and believe that there will be an increasing number of such opportunities due to still extensive holdings of commercial real estate on corporate balance sheets, financial metrics which discourage such ownership and the relative attractiveness of the capital that we and others in the sale leaseback industry can offer.
Build-to-Suits — Our management team has extensive experience in build-to-suit transactions whereby we provide construction funding for a property that we acquired or will ultimately acquire. In a build-to-suit transaction, we generally pre-lease all or substantially all of the property to a single tenant under a long-term lease. We believe there is less competition for such investments due to investors’ relative lack of experience with such investments, the difficulties in obtaining inexpensive asset level financing and a lack of a mandate to make such investments.
Portfolios — We believe there may be opportunities to purchase portfolios of properties from existing owners who are either investor owners or corporations that occupy their properties. We believe that we will have the opportunity to purchase portfolios in exchange for cash, our common shares, units of limited partnership interest in our Operating Partnership or a combination thereof. The market for large portfolios is currently very competitive with many well-capitalized buyers actively bidding for these portfolios and we expect this market to remain competitive for the foreseeable future.
Target Investments that Maximize Growth Potential
Opportunities to Extend Leases through Expansions or Capital Investments — We focus on net leased investment properties where, in our view, there is the potential to invest incremental capital to accommodate a tenant’s business, extend lease terms and increase the value of a property. We believe these opportunities can generate attractive returns due to the nature of the relationship between the landlord and tenant.
Assets with Cycle-Low Rent Levels — We focus on industrial and office properties with rents that we believe are competitive with market rents. These rents have typically resulted in a lease-up of vacant space or a lease renewal completed following the financial crisis. We believe that the net leased marketplace does not properly differentiate and price these properties and that these investment opportunities can generate growth in income and residual value over time as the U.S. economy improves.
Long-term Appreciation Opportunities — We believe there are opportunities to acquire properties with longer term leases that provide current cash flow for the term of the lease and that, if correctly identified, have the potential upon lease expiration for a higher and better use that may provide capital appreciation over the long-run.
Focus on Risk Management
Underwrite and Structure Investments to Protect Downside and Preserve Cash Flows — We seek to invest in properties that have steady, predictable cash flow through: (a) long-term, well-structured leases, (b) high leasehold value for tenants, and (c) a high likelihood of renewal. We further seek to protect our investment by purchasing properties at prices at or below estimated replacement cost.
Utilize Portfolio Diversification — We seek to diversify our portfolio by property type, tenant credit, geography and tenant industry. As of December 31, 2015, our largest tenant was Bank of America, N.A., which accounted for approximately 8% of our annualized base rent revenue as of December 31, 2015. As we grow, we expect to further diversify our portfolio.
Actively Manage the Portfolio to Maximize Tenant Retention and Minimize Vacancy — We believe there are opportunities within our portfolio to extend lease terms through property expansions or tenant improvement investments funded by us.

7



Our Investment Strategy – Europe
We believe that the net leased, single-tenant investment strategy is among the most scalable and transferable across geographies of any property investment strategy. Gramercy Europe Asset Management and Gramercy European Property Fund employ a similar investment strategy to our United States’ operations. In addition to investing in industrial and office properties, we are also focused on purchasing single-tenant specialty retail properties. We believe that the risk-return profiles of single-tenant retail properties in certain markets in Europe are superior to single-tenant retail opportunities available in the United States. Gramercy has a fully integrated presence in Europe, including investment personnel and asset management capability, as well as all support functions through our team based in London.
Leases
The following provides information regarding the various types of leases that we utilize in our operations.
Triple net lease. In our triple net leases, the tenant is responsible for all aspects of and costs related to the property and its operation during the lease term. The landlord may have responsibility under the lease to perform or pay for certain capital repairs or replacements to the roof, structure or certain building systems, such as heating and air conditioning and fire suppression. In some instances the tenant may reimburse the landlord for capital repairs or replacements on an amortized basis. The tenant may have the right to terminate the lease or abate rent due to a major casualty or condemnation affecting a significant portion of the property or due to the landlord’s failure to perform its obligations under the lease. Substantially all of our wholly-owned industrial and specialty asset properties are leased pursuant to triple net leases.
Modified gross lease. In our modified gross leases, the landlord is responsible for some property related expenses during the lease term, but the cost of most of the expenses is passed through to the tenant for reimbursement to the landlord. The tenant may have the right to terminate the lease or abate rent due to a major casualty or condemnation affecting a significant portion of the property or due to the landlord’s failure to perform its obligations under the lease. The Bank of America master lease for the Bank of America Portfolio is a modified gross lease.
Gross lease. In our gross leases, the landlord is responsible for all aspects of and costs related to the property and its operation during the lease term. The tenant may have the right to terminate the lease or abate rent due to a major casualty or condemnation affecting a significant portion of the property or due to the landlord’s failure to perform its obligations under the lease. As of December 31, 2015, gross leases in our portfolio represented less than one percent of our total contractual base rent.
Escalations/Renewals. Our leases may be subject to varying provisions regarding rent escalations and renewals. The properties within our Bank of America Portfolio typically have 1.5% rent increases every five years and six tenant renewal options of five years each. Our remaining leases have rent escalation and renewal options that vary in amount and duration.
Our Competitive Strengths
We believe that we distinguish ourselves from other net leased companies through the following competitive strengths:
Management Team with Extensive Specialized Net Lease Expertise
Since July 2012 we have been led by Gordon F. DuGan, our Chief Executive Officer, Benjamin P. Harris, our President, and Nicholas L. Pell, our Managing Director - Head of Investments, with a combined greater than 50 years of real estate experience.
Our eight senior officers have an average of approximately 20 years of real estate experience.
Demonstrated Track Record
We grew our shareholder equity from a deficit of approximately $352.3 million as of July 1, 2012 to approximately equity of $2.9 billion as of December 31, 2015.
During the same period, we sourced and acquired (directly or in unconsolidated equity investments) approximately $5.6 billion in net leased investments.
During the same period, we marketed and sold for our company and third parties 399 non-core properties for an aggregate gross sale price of approximately $1.4 billion.
During the same period, we outperformed the Standard & Poor’s 500 Composite Index and the NAREIT All REIT Index by 89% and 99%, respectively.
Focused and Disciplined Investment Strategy
We are uniquely focused on acquiring well-positioned net leased industrial and office properties.

8



Our target markets consist of Metropolitan Statistical Areas, or MSAs, that have strong demographics and business-friendly environments, among other things.
Our quantitative underwriting model allows us to evaluate opportunities from a risk/return perspective.
Strong, Long-Standing Industry Relationships
Our management team has cultivated relationships with various constituents in the net leased market for over two decades.
We believe our management team’s experience in the sale leaseback space may result in our receiving a “first-call” from numerous companies, advisors, brokers and private equity firms interested in possible sale leaseback transactions.
Full Service Asset Management Platform
We operate a full service property management and asset management platform that we utilize to actively manage our portfolio. We believe that this in-house expertise and capability gives us a competitive advantage in managing our portfolio and taking advantage of opportunities to extend leases, improve assets, mitigate losses in tenant defaults and non-renewals and invest incremental capital into the portfolio at attractive returns.
Ability to Move Fast
We believe we have established a reputation for closing transactions quickly and efficiently.
Our due diligence and closing group have extensive experience in closing transactions.
Our $850.0 million senior unsecured revolving credit facility, our $1.3 billion aggregate senior unsecured term loans, our senior unsecured notes, and other sources of capital allow us to purchase properties for cash instead of with property-specific borrowings, such as mortgages, which can add to the time it would otherwise take to close on an acquisition.
Our Investment Process – United States
Sourcing and Initial Review
We utilize relationships with various real estate owners, real estate advisors and intermediaries, developers, investment and commercial banks, private equity sponsors, and other potential deal sources to identify a broad pipeline of investment opportunities. Our investment team actively reviews this pipeline and identifies a subset of properties that meet our investment criteria. Our initial review includes an evaluation of the credit of the tenant, the criticality of the property, an evaluation of the market and submarket where the property is located, the location, age, functionality and marketability of the property, the lease structure and how contract rents relate to rents for similar buildings in the submarket, the replacement cost for a similar asset, the expected returns and pricing, and other factors that go into the overall evaluation of the investment opportunity. Our management team actively looks to source proprietary investment opportunities that are not being generally marketed for sale.
Underwriting and Analysis
As part of a potential property acquisition, we evaluate the creditworthiness of the tenant and the tenant’s ability to generate sufficient cash flow to make payments to us pursuant to the lease. We evaluate each potential tenant for its creditworthiness, considering factors such as the tenant’s rating by a national credit rating agency, if any, management experience, industry position and fundamentals, operating history and capital structure. We may also conduct interviews with management and owners of the tenant and/or its affiliates as a part of this process. The creditworthiness of a tenant is determined on a tenant-by-tenant and case-by-case basis. Therefore, general standards for creditworthiness cannot be applied.
Due Diligence Review
We perform a due diligence review with respect to each potential property acquisition, such as evaluating the physical condition, evaluating compliance with zoning and site requirements, as well as completing an environmental site assessment in an attempt to determine potential environmental liabilities associated with a property prior to its acquisition, although there can be no assurance that hazardous substances or wastes (as defined by present or future federal or state laws or regulations) will not be discovered on the property after we acquire it.
We review the structural soundness of the improvements on the property and typically engage a structural engineer to review all aspects of the structures in order to determine the longevity of each building on the property. This review normally also includes the components of each building, such as the roof, the electrical wiring, the heating and air-conditioning system, the plumbing, parking lot and various other aspects such as compliance with federal, state and local building codes.

9



We physically inspect the real estate and surrounding area as part of our process for determining the value of the real estate. We may supplement our valuation with a real estate appraisal. When appropriate, we may also engage experts to undertake some or all of the due diligence efforts described above.
Investment Policy
All real estate investments, dispositions and financings must be approved by a credit committee consisting of our most senior officers, including the affirmative approval of our Chief Executive Officer. Real estate investments and dispositions at a loss (based on book value at the time of sale) having a transaction value greater than $30.0 million must also be approved by the investment committee of our board of trustees. Our board of trustees must approve all such transactions having a value of $100.0 million or more. Additionally, the investment committee must approve non-recourse financings greater than $30.0 million and our board of trustees must approve all recourse financings, regardless of amount, and non-recourse financings of $100.0 million or more and all related-party transactions, regardless of amount. For purposes of approval thresholds, unconsolidated equity investments are calculated using our allocated portion of the price of the asset or amount of the financing.
We generally intend to hold the investment properties we acquire for an extended period. However, circumstances might arise which could result in the early sale of some properties. We also may acquire a portfolio of properties with the intention of holding only a core group of properties and disposing of the remainder of the portfolio in single or multiple sales. The determination of whether a particular property should be sold or otherwise disposed of will be made after consideration of all relevant factors, including prevailing economic conditions, with a view to achieving maximum capital appreciation. The selling price of a property will depend on many of the same factors identified above with respect to our investment process for acquisitions.
We may use TRSs to acquire, hold, or dispose of property, including assets that may not be deemed to be REIT-qualified assets. Taxes paid by such entity will reduce the cash available to us to fund our continuing operations and cash available for distributions to our shareholders.
Some of our investments have been made and may continue to be made through unconsolidated equity investments, which permit us to own interests in larger properties or portfolios without restricting the diversity of our portfolio. We will not enter into an unconsolidated equity investment to make an investment that we would not otherwise purchase on our own under our existing investment policies. As of December 31, 2015, we have investments in seven unconsolidated equity investments. Our unconsolidated equity investments consists of the following: (1) 80% interest in a portfolio of 13 office and industrial properties in the United States which are managed by Duke Realty, our joint venture partner, or the Duke Joint Venture, (2) 80% interest in a portfolio of nine industrial properties in Europe which are managed by Goodman Group, our joint venture partner, or the Goodman Europe Joint Venture, (3) 80% interest in a portfolio of three industrial properties in the United Kingdom which are managed by the Goodman, our joint venture partner, or the Goodman UK Joint Venture, (4) 20% interest in the Gramercy European Property Fund which invests in industrial, office and specialty retail assets throughout Europe and owns a portfolio of 12 properties, (5) 50% interest in an office property located in Morristown, New Jersey, which is undergoing construction for improvements or the Morristown Joint Venture, (6) 5.07% interest in a portfolio of two properties in Asia which are managed by CBRE Investors SP Asia II, LLC, our joint venture partner, or CBRE Strategic Partners Asia II, and (7) 25% interest in an office located in Somerset, New Jersey which is 100% net leased to Philips Holdings, USA Inc., a wholly-owned subsidiary of Royal Philips Electronics, through December 2021, or the Philips Joint Venture.
Use of Leverage
In addition to cash on hand and cash from operations, we anticipate using funds from various sources to finance our acquisitions and operations, including public and private debt and equity issuances, unsecured bank credit facilities and term loans, property-level mortgage debt, OP units and other sources that may become available from time to time. We believe that moderate leverage is prudent. In 2015, we achieved investment grade credit rating of Baa3 from Moody's Investors Services and BBB- from Standard and Poor's Rating Service, both with a stable outlook.
We expect that any property-level mortgage borrowings will be structured as non-recourse to us, with limited exceptions that would trigger recourse to us only upon the occurrence of certain fraud, misconduct, environmental, bankruptcy or similar events.

10



At the close of the Merger on December 17, 2015, we entered into a new, unsecured credit facility with J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated that consists of an $850.0 million senior unsecured revolving credit facility, or the 2015 Revolving Credit Facility, which expires in January 2020, and a term loan facility, or the 2015 Term Loan, which consists of a $300.0 million term loan expiring in January 2019 and a $750.0 million term loan expiring in January 2021. We also entered into a new $175.0 million unsecured term loan with Capital One, N.A. that expires in January 2023, or the 7-Year Term Loan, and completed a private placement of $150.0 million in senior unsecured notes maturing in December 2024, or the Senior Unsecured Notes, of which $100.0 million was funded at the time of the Merger and $50.0 million was funded in January 2016. We are a guarantor of the obligations under the 2015 Revolving Credit Facility, the 2015 Term Loan, the 7-Year Term Loan, and the Senior Unsecured Notes.
In connection with the Merger, we assumed Chambers’ $850.0 million unsecured revolving credit facility, which had a maturity date of January 15, 2018, as well as Chambers’ four unsecured term loans, which had maturity dates between March 2018 and January 2021. We paid off all of the outstanding loan balances on these facilities on December 17, 2015, subsequent to closing, and entered into the 2015 Revolving Credit Facility, 2015 Term Loan, and 7-Year Term Loan, as described above.
In June 2014, we entered into a Revolving Credit and Term Loan Agreement for a $400.0 million unsecured credit facility consisting of a $200.0 million senior term loan, or the 2014 Term Loan, and a $200.0 million senior revolving credit facility, or the 2014 Revolving Credit Facility. We expanded the revolving borrowing capacity to $400.0 million in January 2015 and further amended the revolving borrowing capacity in May 2015 to bifurcate it into a $350.0 million tranche denominated in U.S. dollars and a $50.0 million foreign currency denominated tranche. In July 2015, we expanded the 2014 Term Loan to $300.0 million and increased the borrowing capacity under the U.S. denominated tranche of the 2014 Revolving Credit Facility to $450.0 million. The 2014 Term Loan had an expiration in June 2019 and was originally used to repay the existing $200.0 million mortgage loan secured by the Bank of America Portfolio at the time of our acquisition of the remaining 50% equity interest in the Bank of America Portfolio joint venture. The 2014 Revolving Credit Facility had an expiration in June 2018, with an option for a one-year extension, and originally replaced our previously existing $150.0 million secured credit facility, or the Secured Credit Facility, which was terminated simultaneously. The 2014 Term Loan and 2014 Revolving Credit Facility were guaranteed by Gramercy Property Trust Inc. and certain subsidiaries. As noted above, the 2014 Term Loan and the 2014 Revolving Credit Facility were terminated at the closing of the Merger on December 17, 2015, at which time we entered into the 2015 Revolving Credit Facility, 2015 Term Loan, and 7-Year Term Loan, as described above.
In March 2014, we issued $115.0 million of 3.75% unsecured exchangeable senior notes, or the Exchangeable Senior Notes. The Exchangeable Senior Notes are senior unsecured obligations of the Operating Partnership and are guaranteed by us on a senior unsecured basis. The Exchangeable Senior Notes mature on March 15, 2019, unless redeemed, repurchased or exchanged in accordance with their terms prior to such date. The Exchangeable Senior Notes will be exchangeable, under certain circumstances, for cash, for common shares or for a combination of cash and common shares, at the Operating Partnership's election. The Exchangeable Senior Notes will also be exchangeable prior to the close of business on the second scheduled trading day immediately preceding the stated maturity date, at any time beginning on December 15, 2018, and also upon the occurrence of certain events. On or after March 20, 2017, in certain circumstances, the Operating Partnership may redeem all or part of the Exchangeable Senior Notes for cash at a price equal to 100% of the principal amount of the Exchangeable Senior Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. As a result of transactions we entered into under the Merger Agreement, the Exchangeable Senior Notes became exchangeable at the option of the holder commencing August 13, 2015 and remained exchangeable for 35 trading days following the consummation of the Merger, which occurred on December 17, 2015, in accordance with the terms of the indenture governing the Exchangeable Senior Notes. No holders elected to exercise the aforementioned exchange option. The Exchangeable Senior Notes have an initial and current exchange rate of 40.2966 and 40.9434 units of Merger consideration, or Units of Merger Consideration, respectively, where one Unit of Merger Consideration represents 3.1898 of our common shares, or approximately 128.5380 and 130.6013 of our common shares for each $1.0 thousand principal amount of the Exchangeable Senior Notes, respectively, representing an exchange price of approximately $7.78 and $7.66 per share of our common shares, respectively.
We intend to use unsecured credit facilities and other entity level borrowings in the future as a part of our overall capital structure.
Our organizational documents do not limit the amount or percentage of indebtedness that we may incur. The amount of leverage we will deploy for particular investments will depend on an assessment of a variety of factors, which may include the availability and cost of financing the assets, the creditworthiness of our tenants, the health of the U.S. economy and commercial mortgage markets, our outlook for the level, slope and volatility of interest rates, and the overall quality of the properties that secure the indebtedness.

11



Asset and Property Management
In addition to net leased investing, we also operate a commercial real estate management business for third parties. As of December 31, 2015, this business, which operates under the name Gramercy Asset Management, manages approximately $900.0 million of commercial properties. We manage properties for companies including KBS Real Estate Investment Trust, Inc., or KBS, and the Gramercy European Property Fund.
We have an integrated asset management platform within Gramercy Asset Management to consolidate responsibility for, and control over, leasing, lease administration, property management, operations, construction management, tenant relationship management and property accounting. To the extent that we provide asset management services for third-party property owners, we provide such services in consultation with and at the direction of such owners.
Our Management Agreement with KBS provides for a base management fee of $7.5 million per year as well as certain other fees as provided therein. The term of the Management Agreement will continue to December 31, 2016 (with a one year extension option exercisable by KBS), unless earlier terminated as therein provided, and also provides incentive fees in the form of profit participation ranging from 10% - 30% of incentive profits earned on sales.
In December 2014, we assumed a Property and Asset Management Agreement, or Gramercy Europe Management Agreement, in connection with our acquisition of ThreadGreen Europe Limited, which we subsequently renamed Gramercy Europe Asset Management. Pursuant to the Gramercy Europe Management Agreement, Gramercy Europe Asset Management provides property, asset management and advisory services to an existing portfolio of single-tenant industrial and office assets located in Germany and Finland, as well as the Gramercy European Property Fund.
Our Investment Process – Europe
The process for acquiring Gramercy European Property Fund properties is similar to the process we follow for our United States investments, including, without limitation, procedures for underwriting and analysis, due diligence review and credit underwriting. However, because Gramercy European Property Fund invests in various countries throughout Europe, the unique regulatory and tax structures in the jurisdictions where the properties are located must also be analyzed and can have a significant impact on the Fund’s decision to invest or not invest in a particular jurisdiction. Gramercy European Property Fund also may employ different financing, leverage and hedging strategies than those we apply to our United States investments.
Commercial Real Estate Finance
In March 2013, we disposed of our Gramercy Finance segment, and exited the commercial real estate finance business. The disposal was completed pursuant to a sale and purchase agreement to transfer the collateral management and sub-special servicing agreements for our three collateralized debt obligations, or CDOs, to CWCapital Investments LLC, or CWCapital, for proceeds of $6.3 million in cash, after expenses. We retained our noninvestment grade subordinate bonds, preferred shares and ordinary shares, or the Retained CDO Bonds, in the CDOs, which may allow us to recoup additional proceeds over the remaining life of the CDOs based upon resolution of underlying assets within the CDOs. However, there is no guarantee that we will realize any proceeds from the Retained CDO Bonds or what the timing of these proceeds might be. In addition to our Retained CDO Bonds, we expect to receive additional cash proceeds for past CDO servicing advances when specific assets within the CDOs are liquidated.
Hedging Activities
We may use a variety of commonly used derivative instruments that are considered conventional, or “plain vanilla” derivatives, including interest rate swaps, caps, collars and floors, in our risk management strategy to limit the effects of changes in interest rates on our operations. Our hedging strategy consists of entering into interest rate swap and interest rate cap contracts as well as net investment hedges. The value of our derivatives may fluctuate over time in response to changing market conditions, and will tend to change inversely with the value of the risk in our liabilities that we intend to hedge. Hedges are sometimes ineffective because the correlation between changes in value of the underlying investment and the derivative instrument is less than was expected when the hedging transaction was undertaken. We continuously monitor the effectiveness of our hedging strategies and we have retained the services of an outside financial services firm with expertise in the use of derivative instruments to advise us on our overall hedging strategy, to effect hedging trades, and to provide the appropriate designation and accounting of all hedging activities from a GAAP and tax accounting and reporting perspective.

12



Interest rate swap and interest rate cap instruments are used to hedge as much of the interest rate risk as we determine is in the best interest of our shareholders, given the cost of such hedges. Net investment hedges are used to hedge exposure to changes in the euro-U.S. dollar exchange rate related to our net equity investment in the Gramercy European Property Fund, which has euros as its functional currency. We intend to hedge our foreign currency exposure related to future investments made in Europe by financing our investments in the local currency denominations and entering into additional net investment hedges related to those investments.
Equity Capital Policies
Subject to applicable law and our charter, our board of trustees has the authority, without further shareholder approval, to issue additional authorized common shares and preferred shares or otherwise raise capital, including through the issuance of senior securities, in any manner and on the terms and for the consideration it deems appropriate. We may, under certain circumstances, repurchase our common or preferred shares in private transactions with our shareholders if those purchases are approved by our board of trustees and are in accordance with our charter.
Future Revisions in Policies and Strategies
If our board of trustees determines that additional funding is required, we may raise such funds through additional offerings of equity or debt securities or the retention of cash flow (subject to REIT distribution requirements) or a combination of these methods. In the event that our board of trustees decides to raise additional equity capital, it has the authority, without obtaining shareholder approval, to issue additional common shares or preferred shares in any manner and on such terms and for such consideration as it deems appropriate, at any time. Our investment guidelines and our portfolio and leverage are periodically reviewed by our board of trustees.
Competition
The market for acquiring well-positioned net leased properties is currently very competitive and likely to remain very competitive for the foreseeable future. We compete for net leased real estate with a variety of other potential purchasers, including other public and private real estate investment companies, some of which have greater financial or other resources than we do. We also compete for tenants with other net leased property owners. Deteriorating investment opportunities in a highly competitive marketplace may negatively impact our pace of acquisitions, the prices we pay for the properties we acquire and our results from operations.
Although we believe that we are positioned to compete effectively in each facet of our business, there is considerable competition in our market sector and there can be no assurance that we will compete effectively or that we will not encounter increased competition in the future that could limit our ability to conduct our business effectively.
Compliance With The Americans With Disabilities Act of 1990
Properties that we acquire, and the properties underlying our investments, are required to meet federal requirements related to access and use by disabled persons as a result of the Americans with Disabilities Act of 1990, or the Americans with Disabilities Act. In addition, a number of additional federal, state and local laws may require modifications to any properties we purchase, or may restrict further renovations of our properties, with respect to access by disabled persons. Noncompliance with these laws or regulations could result in the imposition of fines or an award of damages to private litigants. Additional legislation could impose additional financial obligations or restrictions with respect to access by disabled persons. If required changes involve greater expenditures than we currently anticipate, or if the changes must be made on a more accelerated basis, our ability to make distributions could be adversely affected.

13



Other Information
Our corporate office is located in midtown Manhattan at 521 Fifth Avenue, 30th Floor, New York, New York 10175. We also have regional offices located in London, United Kingdom, Horsham, Pennsylvania, and Clayton, Missouri. We can be contacted at (212) 297-1000. We maintain a website at www.gptreit.com. Our reference to our website is intended to be an inactive textual reference only. On our website, you can obtain, free of charge, a copy of our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, as soon as practicable after we file such material electronically with, or furnish it to, the Securities and Exchange Commission, or the SEC. We have also made available on our website our audit committee charter, compensation committee charter, nominating and corporate governance committee charter, code of business conduct and ethics, whistleblowing and whistle blower protection policy, and corporate governance principles. Information on, or accessible through, our website is not part of, and is not incorporated into, this report. You can also read and copy materials we file with the SEC at its Public Reference Room at 100 F Street, NE, Washington, DC 20549 (1-800-SEC-0330). The SEC maintains an Internet site (www.sec.gov) that contains reports, proxy and information statements, and other information regarding the issuers that file electronically with the SEC.
Industry Segments
As of December 31, 2015, we have two reportable operating segments: Investments/Corporate and Asset Management. The reportable segments were determined based on the management approach, which looks to our internal organizational structure. These two lines of business require different support infrastructures. The Investments/Corporate segment includes all of our activities related to investment and ownership of commercial properties net leased to high quality tenants throughout the United States. The Investments/Corporate segment generates revenues from rental revenues from properties that we own, either directly or in an unconsolidated equity investment. The Asset Management segment includes substantially all of our activities related to third-party asset and property management of commercial properties located throughout the United States and Europe. Segment revenue and profit information is presented in Note 19 to our financial statements.
Employees
As of December 31, 2015, we had 100 employees. None of our employees are represented by a collective bargaining agreement.
Corporate Governance and Internet Address; Where Readers Can Find Additional Information
We emphasize the importance of professional business conduct and ethics through our corporate governance initiatives. Our board of trustees consists of a majority of independent trustees; the Audit, Nominating and Corporate Governance, and Compensation Committees of our board of trustees are composed exclusively of independent trustees. We have adopted corporate governance guidelines, a whistleblowing and whistle blower protection policy, and a code of business conduct and ethics.
We file annual, quarterly and current reports, proxy statements and other information required by the Exchange Act with the SEC. Readers may read and copy any document that we file at the SEC’s Public Reference Room located at 100 F Street, N.E., Washington, D.C. 20549, U.S.A. Please call the SEC at 1-800-SEC-0330 for further information on the Public Reference Room. Our SEC filings are also available to the public from the SEC’s internet site at www.sec.gov. Copies of these reports, proxy statements and other information can also be inspected at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
Our internet site is www.gptreit.com. Our reference to our website is intended to be an inactive textual reference only. We make available free of charge through our internet site our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and Forms 3, 4 and 5 filed on behalf of trustees and executive officers and any amendments to those reports filed or furnished pursuant to the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Also posted on our website in the “Investor Relations — Corporate Governance” section are charters for our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee as well as our Corporate Governance Guidelines, our Whistleblowing and Whistle Blower Protection Policy, and our Code of Business Conduct and Ethics governing our trustees, officers and employees. Information on, or accessible through, our website is not a part of, and is not incorporated into, this report.

14



Environmental Matters
We are exposed to various environmental risks that may result in unanticipated losses and affect our operating results and financial condition. We generally conduct environmental assessments of the properties we acquire, including land. While some of these assessments have led to further investigation and sampling, none of the environmental assessments has revealed an environmental liability that we believe would have a material adverse effect on our business, financial condition or results of operations.
Insurance
We carry commercial liability and all risk property insurance, including where required, flood, earthquake, wind and terrorism coverage, on substantially all of the properties that we own. For certain net leased properties, however, we rely on our tenant’s insurance and do not maintain separate coverage. We continue to monitor the state of the insurance market and the scope and costs of specialty coverage, including flood, earthquake, wind and terrorism. We cannot anticipate what coverage will be available on commercially reasonable terms in future policy years. We believe that the insured limits are appropriate given the relative risk of loss, the cost of the coverage and industry practice.
Substantially all of the legacy Chambers properties are covered by a year-to-year environmental insurance policy that expires in June 2016. Substantially all of the Legacy Gramercy properties are covered by an environmental insurance policy that expires in October 2019. However, these policies are subject to exclusions and limitations and do not cover all of the properties owned by us, and for those properties covered under the policies, insurance may not fully compensate us for any environmental liability. We may not desire to renew an environmental insurance policy in place upon expiration or a replacement policy may not be available at a reasonable cost, if at all.

15



ITEM 1A.    RISK FACTORS 
Cautionary Note Regarding Forward-Looking Information
This report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. You can identify forward-looking statements by the use of forward-looking expressions such as “may,” “will,” “should,” “expect,” “believe,” “anticipate,” “estimate,” “intend,” “plan,” “project,” “continue,” or any negative or other variations on such expressions. Forward-looking statements include information concerning possible or assumed future results of our operations, including any forecasts, projections, plans and objectives for future operations. Although we believe that our plans, intentions and expectations as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions or expectations will be achieved. We have listed below some important risks, uncertainties and contingencies which could cause our actual results, performance or achievements to be materially different from the forward-looking statements we make in this report. These risks, uncertainties and contingencies include, but are not limited to, the following:
the success or failure of our efforts to implement our current business strategy, including our ability to timely and profitably dispose of non-core assets and reinvest in target assets;
our ability to identify and complete additional property acquisitions and risks of real estate acquisitions;
availability of investment opportunities on real estate assets and real estate-related and other securities;
the performance and financial condition of tenants and corporate customers;
the adequacy of our cash reserves, working capital and other forms of liquidity;
the availability, terms and deployment of short-term and long-term capital;
demand for industrial and office space;
the actions of our competitors and our ability to respond to those actions;
the timing of cash flows from our investments;
the cost and availability of our financings, which depends in part on our asset quality, the nature of our relationships with our lenders and other capital providers, our business prospects and outlook and general market conditions;
economic conditions generally and in the commercial finance and real estate markets and the banking industry specifically;
our international operations, including unfavorable foreign currency rate fluctuations, enactment or changes in laws relating to foreign ownership of property, and local economic or political conditions that could adversely affect our earnings and cash flows;
unanticipated increases in financing and other costs, including a rise in interest rates;
reduction in cash flows received from our investments;
volatility or reduction in the value or uncertain timing in the realization of our Retained CDO Bonds;
our ability to profitably dispose of non-core assets;
the high tenant concentration of our Bank of America Portfolio;
availability of, and ability to retain, qualified personnel and trustees;
changes to our management and board of trustees;
changes in governmental regulations, tax rates and similar matters;
legislative and regulatory changes (including changes to real estate and zoning laws, laws governing the taxation of REITs or the exemptions from registration as an investment company);
environmental and/or safety requirements and risks related to natural disasters;

16



declining real estate valuations and impairment charges;
our ability to satisfy complex rules in order for us to qualify as a REIT for U.S. federal income tax purposes and qualify for our exemption under the Investment Company Act, our Operating Partnership’s ability to satisfy the rules in order to qualify as a partnership for U.S. federal income tax purposes, and the ability of certain of our subsidiaries to qualify as REITs and certain of our subsidiaries to qualify as TRSs for U.S. federal income tax purposes, and our ability and the ability of our subsidiaries to operate effectively within the limitations imposed by these rules;
uninsured or underinsured losses relating to our properties;
our inability to comply with the laws, rules and regulations applicable to companies, and in particular, public companies;
tenant bankruptcies and defaults on or non-renewal of leases by tenants;
decreased rental rates or increased vacancy rates;
the continuing threat of terrorist attacks on the national, regional and local economies; and
other factors discussed under Item 1A, “Risk Factors” of this Annual Report on Form 10-K for the year ended December 31, 2015 and those factors that may be contained in any filing we make with the Securities and Exchange Commission, or the SEC, which are incorporated by reference herein.
We assume no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. In evaluating forward-looking statements, you should consider these risks and uncertainties, together with the other risks described from time-to-time in our reports and documents which are filed with the SEC, and you should not place undue reliance on those statements.
The risks included here are not exhaustive. Other sections of this report may include additional factors that could adversely affect our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.
Risks Related to Our Business and Investments
We face additional risks as a result of the Merger and may be unable to integrate our businesses successfully and realize the anticipated synergies and related benefits of the Merger or do so within the anticipated timeframe.
On December 17, 2015, the Merger of Chambers and Legacy Gramercy was completed. The Merger involved a combination of two companies that previously operated as independent public companies, and as a result of the Merger, the combined company faces various additional risks, including, among others, the following:
our inability to implement our future plans to dispose of certain assets and selected properties or take other actions to reposition our portfolio;
the implementation of our disposition plan in a manner that causes volatility in our earnings or delays or inhibits our ability to implement other future business plans;  
our inability to successfully combine the businesses in a manner that permits the combined company to achieve the cost savings anticipated to result from the Merger; and
the additional complexities of combining two companies with different markets, tenant relationships and service providers.    
Our ability to execute all such plans will depend on various factors, many of which remain outside our control. Any of these risks could adversely affect our business and financial results.

17



Our future growth will depend upon our ability to acquire and lease properties in a competitive real estate business.
Our future growth will depend, in large part, upon our ability to acquire and lease properties. In order to grow we need to continue to acquire and finance investment properties and sell non-core properties. We face significant competition with respect to our acquisition and origination of assets from many other companies, including other REITs, insurance companies, private investment funds, hedge funds, specialty finance companies and other investors. Some competitors may have a lower cost of funds and access to funding sources that are not available to us. In addition, some of our competitors may have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of investments and establish more relationships than us. Furthermore, there is significant competition on a national, regional and local level with respect to property management services and in commercial real estate services generally, and we are subject to competition from large national and multi-national firms as well as local or regional firms that offer similar services to ours. Some of our competitors may have greater financial and operational resources, larger customer bases, and more established relationships with their customers and suppliers than we do. The competitive pressures we face, if not effectively managed, may have a material adverse effect on our business, financial condition, liquidity and results of operations.
Also, as a result of this competition, we may not be able to take advantage of attractive origination and investment opportunities and therefore may not be able to identify and pursue opportunities that are consistent with our objectives. Competition may limit the number of suitable investment opportunities offered to us. It may also result in higher prices, lower yields and a narrower spread of yields over our borrowing costs, making it more difficult for us to acquire new investments on attractive terms. In addition, competition for desirable investments could delay our investment in desirable assets, which may in turn reduce our earnings per share and negatively affect our ability to declare and make distributions to our shareholders.
A concentration of our investments in a limited number of property classes may leave our profitability vulnerable to a downturn in such sectors.
At any one time, a significant portion of our property investments may be in a limited number of property classes. As a result, we are subject to risks inherent in investments in these classes and downturns in the businesses conducted at these properties could adversely impact our revenues and financial condition if tenants are unable to renew their leases or meet their payment obligations under existing leases.
We may be adversely affected by unfavorable economic changes in geographic areas where our properties are concentrated.
Adverse conditions (including business layoffs or downsizing, industry slowdowns, changing demographics and other factors) in the areas where our properties are located and/or concentrated, and local real estate conditions (such as oversupply of, or reduced demand for, office, industrial or retail properties) may have an adverse effect on the value of our properties. A material decline in the demand or the ability of tenants to pay rent for office, industrial or retail space in these geographic areas may result in a material decline in our cash available for distribution to our shareholders.
Adverse economic conditions affecting the particular industries of our tenants may adversely affect our income and our ability to pay distributions to our shareholders.
We are subject to certain industry concentrations with respect to our properties, including among others financial services (including the Bank of America Portfolio), pharmaceutical and healthcare, consumer products and internet retail. Adverse economic conditions affecting a particular industry could affect the financial ability of one or more of our tenants to make payments under their leases, which could cause delays in our receipt of rental revenues or a vacancy in one or more of our properties for a period of time, and could lead to an even greater risk to the extent that the makeup of our tenants becomes even less diversified by industry as a result of adverse conditions affecting any one particular industry. Therefore, changes in economic conditions of the particular industry of one or more of our tenants could reduce our ability to pay dividends and the value of one or more of our properties at the time of sale of such properties.

18



We expect to lease a significant portion of our real estate to tenants who do not have investment grade credit ratings, which may result in our leasing to tenants that are more likely to default in their obligations to us than a tenant with an investment grade credit rating.
A significant portion of the leases at our properties are, or may be, with tenants that do not have investment grade credit ratings. All of our tenants may face exposure to adverse business or economic conditions which could lead to an inability to meet their obligations to us. However, non-investment grade tenants may not have the financial capacity or liquidity to adapt to these conditions or may have less diversified businesses, which may exacerbate the effects of adverse conditions on their businesses. Moreover, the fact that a substantial majority of our tenants are not investment grade may cause investors or lenders to view our cash flows as potentially less stable, which may increase our cost of capital, limit our financing options or adversely affect the trading price of our common shares.
If we cannot generate or obtain additional capital, our ability to make acquisitions and lease properties will be limited. We are subject to risks associated with debt and capital share issuances, and such issuances may have consequences to holders of our common and preferred shares.
Our ability to make acquisitions and lease properties will depend, in large part, upon our ability to raise additional capital or generate funds from the sale of properties. If we were to raise additional capital through the issuance of equity securities, we could dilute the interests of holders of our common shares. Our board of trustees may authorize the issuance of additional classes or series of preferred shares which may have rights that could dilute, or otherwise adversely affect, the interest of holders of our common shares.
We intend to incur additional indebtedness in the future, which may include an additional corporate credit facility. Such indebtedness could also have other important consequences to holders of the notes and holders of our common and preferred shares, including subjecting us to covenants restricting our operating flexibility, increasing our vulnerability to general adverse economic and industry conditions, limiting our ability to obtain additional financing to fund future working capital, capital expenditures and other general corporate requirements, requiring the use of a portion of our cash flow from operations for the payment of principal and interest on our indebtedness, thereby reducing our ability to use our cash flow to fund working capital, acquisitions, capital expenditures and general corporate requirements, and limiting our flexibility in planning for, or reacting to, changes in our business and our industry.
We are dependent on key personnel whose continued service is not guaranteed.
We rely on a small number of persons who comprise our existing senior management team and our board of trustees to implement our business and investment strategies. While we have entered into employment and/or retention agreements with certain members of our senior management team, they may nevertheless cease to provide services to us at any time.
The loss of services of any of our key management personnel or trustees or significant numbers of other employees, or our inability to recruit and retain qualified personnel or trustees in the future, could have an adverse effect on our business.
We are required to make a number of judgments in applying accounting policies, and different estimates and assumptions in the application of these policies could result in changes to our reporting of financial condition and results of operations.
Various estimates are used in the preparation of our financial statements, including estimates related to asset and liability valuations (or potential impairments), various receivables and the dilutive effect of participating instruments including our convertible notes. Often these estimates require the use of market data values which may be difficult to assess, as well as estimates of future performance or receivables collectability which may be difficult to accurately predict. While we have identified those accounting policies that are considered critical and have procedures in place to facilitate the associated judgments, different assumptions in the application of these policies could result in material changes to our financial condition and results of operations.
We utilize, and intend to continue to utilize, leverage which may limit our financial flexibility in the future.
We make acquisitions and operate our business in part through the utilization of leverage pursuant to loan agreements with various financial institutions. These loan agreements contain financial covenants that restrict our operations. These financial covenants, as well as any future financial covenants we may enter into through further loan agreements, could inhibit our financial flexibility in the future and prevent distributions to shareholders.

19



We may incur losses as a result of ineffective risk management processes and strategies.
We seek to monitor and control our risk exposure through a risk and control framework encompassing a variety of separate but complementary financial, credit, operational, compliance and legal reporting systems, internal controls, management review processes and other mechanisms. While we employ a broad and diversified set of risk monitoring and risk mitigation techniques, those techniques and the judgments that accompany their application cannot anticipate every economic and financial outcome or the specifics and timing of such outcomes. Thus, we may, in the course of our activities, incur losses due to these risks.
We are highly dependent on information systems and third parties, and systems failures could significantly disrupt our business, which may, in turn, negatively affect our operating results.
Our business is highly dependent on communications and information systems, some of which are provided by third parties. Any failure or interruption of our systems could cause delays in our collection of rents or significant increases in our expenses, which could have a material adverse effect on our operating results.
We may not be able to relet or renew leases at the properties held by us on terms favorable to us or at all.
We are subject to risks that upon expiration or earlier termination of the leases for space located at our properties the space may not be relet or, if relet, the terms of the renewal or reletting (including the costs of required renovations or concessions to tenants) may be less favorable than current lease terms. Any of these situations may result in extended periods where there is a significant decline in revenues or no revenues generated by a property. If we are unable to relet or renew leases for all or substantially all of the spaces at these properties, if the rental rates upon such renewal or reletting are significantly lower than expected, if our reserves for these purposes prove inadequate, or if we are required to make significant renovations or concessions to tenants as part of the renewal or reletting process, we will experience a reduction in net income and may be required to reduce or eliminate distributions to our shareholders. In addition, certain of our properties are currently leased at above-market rents, so our shareholders may also suffer a loss (and a reduction in distributions) after the expiration of the lease terms if we are not able to relet such spaces on favorable terms.
Our results of operations rely on major tenants, and the insolvency, bankruptcy or receivership of these or other tenants could adversely affect our results of operations.
Our rental income depends on entering into leases with and collecting rents from tenants. General and regional economic conditions may adversely affect our major tenants and potential tenants in our markets. Our major tenants may experience a material business downturn, weakening their financial condition and potentially resulting in their failure to make timely rental payments and/or a default under their leases. In many cases, we have made substantial up front investments in the applicable leases, through tenant improvement allowances and other concessions, as well as typical transaction costs (including professional fees and commissions) that we may not be able to recover. In the event of any tenant default, we may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment.
The bankruptcy or insolvency of a major tenant also may adversely affect the income produced by our properties. If any tenant becomes a debtor in a case under the U.S. Bankruptcy Code, we cannot evict the tenant solely because of the bankruptcy. In addition, the bankruptcy court might authorize the tenant to reject and terminate their lease with us. The bankruptcy of a tenant or lease guarantor could delay our efforts to collect past due balances under the relevant leases, and could ultimately preclude collection of these sums. If a lease is rejected by a tenant in bankruptcy, we would have only a general unsecured claim for damages. Any unsecured claim we hold may be paid only to the extent that funds are available and only in the same percentage as is paid to all other holders of unsecured claims, and there are restrictions under bankruptcy laws that limit the amount of the claim we can make if a lease is rejected.
Our revenue and cash flow could be materially adversely affected if any of our significant tenants were to become bankrupt or insolvent, suffer a downturn in their business, fail to abide by the terms of their leases, fail to renew their leases at all or renew on terms less favorable to us than their current terms.

20



Lease defaults or terminations or landlord-tenant disputes may adversely reduce our income from our leased property portfolio.
Lease defaults or terminations by one or more of our significant tenants may reduce our revenues unless a default is cured or a suitable replacement tenant is found promptly. In addition, disputes may arise between the landlord and tenant that result in the tenant withholding rent payments, possibly for an extended period. These disputes may lead to litigation or other legal procedures to secure payment of the rent withheld or to evict the tenant. In other circumstances, a tenant may have a contractual right to abate or suspend rent payments. Even without such right, a tenant might determine to do so. Any of these situations may result in extended periods during which there is a significant decline in revenues or no revenues generated by the property. If this were to occur, it could adversely affect our results of operations.
Inflation may adversely affect our financial condition and results of operations.
Although inflation has not materially impacted our results of operations in the recent past, increased inflation could have a more pronounced negative impact on any variable rate debt we incur in the future and on our results of operations. During times when inflation is greater than increases in rent, the contracted rent increases called for under our leases may be unable to keep pace with the rate of inflation. Likewise, even though our triple-net leases generally reduce our exposure to rising property expenses resulting from inflation, substantial inflationary pressures and increased costs may have an adverse impact on our tenants, which may adversely affect the tenants’ ability to pay rent.
Our net leases may require us to pay property-related expenses that are not the obligations of our tenants.
Under the terms of the majority of our net leases, in addition to satisfying their rent obligations, our tenants are responsible for the payment of real estate taxes, insurance and ordinary maintenance and repairs. However, pursuant to certain of our current leases and leases we may assume or enter into in the future, we may be required to pay certain expenses, such as the costs of environmental liabilities, roof and structural repairs, insurance, certain non-structural repairs and maintenance and other costs and expenses for which insurance proceeds or other means of recovery are not available. If one or more of our properties incur significant expenses under the terms of the leases, such property, our business, financial condition and results of operations will be adversely affected and the amount of cash available to meet expenses and to make distributions to our shareholders may be reduced.
We may be required to reimburse tenants for overpayments of estimated operating expenses.
Under certain of our leases, including the lease for the Bank of America Portfolio, tenants pay us as additional rent their proportionate share of the costs we incur to manage, operate and maintain the buildings and properties where they rent space. These leases often limit the types and amounts of expenses we can pass through to our tenants and allow the tenants to audit and contest our determination of the operating expenses they are required to pay. Given the complexity of certain additional rent calculations, tenant audit rights under large portfolio leases can remain unresolved for several years. The tenant under the Bank of America Portfolio lease, for example, is still auditing certain categories of operating expenses for the 2007 and subsequent lease years. If as a result of a tenant audit it is determined that we have collected more additional rent than we are permitted to collect under a lease, we must refund the excess amount back to the tenant and, sometimes, also reimburse the tenant for its audit costs. Such unexpected reimbursement payments could materially adversely affect our financial condition and results of operations.
Net leases may not result in fair market lease rates over time, which could negatively impact our income and reduce the amount of funds available to make distributions to our shareholders.
The vast majority of our rental income comes from net leases, which generally provide the tenant greater discretion in using the leased property than ordinary property leases, such as the right to freely sublease the property, to make alterations in the leased premises and to terminate the lease prior to its expiration under specified circumstances. Furthermore, net leases typically have longer lease terms and, thus, there is an increased risk that contractual rental increases in future years will fail to result in fair market rental rates during those years. As a result, our income and distributions to our shareholders could be lower than they would otherwise be if we did not engage in net leases.

21



Actions of our joint venture partners could negatively impact our performance.
We may, from time to time and as we have done in the past, co-invest with third parties through various arrangements. With such investments, we may not be in a position to exercise sole decision-making authority regarding that property, partnership, joint venture or other entity because our partners may share certain approval rights over major decisions. Investments in partnerships, joint ventures, or other entities may involve risks not present were a third party not involved, including the possibility that our partners, co-tenants or co-venturers might become bankrupt or otherwise fail to fund their share of required capital contributions. Additionally, our partners or co-venturers might at any time have economic or other business interests or goals which are inconsistent with our business interests or goals. These investments may also have the potential risk of impasses on decisions such as a sale, because neither we nor the partner, co-tenant or co-venturer would have full control over the partnership or joint venture. Consequently, actions by such partner, co-tenant or co-venturer might result in subjecting properties owned by the partnership or joint venture to additional risk. In addition, we may in specific circumstances be liable for the actions of our third-party partners, co-tenants or co-venturers.
An uninsured loss or a loss that exceeds the policies on our properties could subject us to lost capital or revenue on those properties.
Under the terms and conditions of the leases currently in force on our properties, tenants generally are required to indemnify and hold us harmless from liabilities resulting from injury to persons, air, water, land or property, on or off the premises, due to activities conducted on the properties, except for claims arising from the negligence or intentional misconduct of us or our agents. Additionally, tenants are generally required, at the tenants’ expense, to obtain and keep in full force during the term of the lease, liability and property damage insurance policies. Insurance policies for property damage are generally in amounts not less than the full replacement cost of the improvements less slab, foundations, supports and other customarily excluded improvements and insure against all perils of fire, extended coverage, vandalism, malicious mischief and special extended perils (“all risk,” as that term is used in the insurance industry). Insurance policies are generally obtained by the tenant providing general liability coverage varying between $1.0 million and $10.0 million depending on the facts and circumstances surrounding the tenant and the industry in which it operates. These policies include liability coverage for bodily injury and property damage arising out of the ownership, use, occupancy or maintenance of the properties and all of their appurtenant areas. To the extent that losses are uninsured or underinsured, we could be subject to lost capital and revenue on those properties.
Termination of our asset management agreement could result in certain costs and revenue disruption.
We have entered into a Management Agreement with KBS to manage a portfolio of properties through December 31, 2016, which includes certain early termination provisions. Expiration or early termination of the Management Agreement could result in certain expenses, including severance fees, and the management fees and payments to be received could cease, thereby reducing our expected revenues, which could harm our business and results of operations.
We are subject to risks and uncertainties associated with operating our asset management business.
We may encounter risks and difficulties as we operate our asset management business. To achieve our goals as an asset manager, we must:
actively manage the assets in such portfolios in order to realize targeted performance; and
create incentives for our management and professional staff to develop and operate the asset management business.
If we do not successfully operate our asset management business to achieve the investment returns that we or the market anticipates, our operations may be adversely impacted.
We are exposed to litigation risks in our role as asset manager.
Our role as asset manager for properties owned by KBS and others exposes us to litigation risks. In this role, we make asset management and other decisions which could result in adverse financial impacts to third parties. These parties may pursue legal action against us as a result of these decisions, the outcomes of which cannot be certain and may materially adversely impact our financial condition and results of operations.

22



Our investments in interest rate hedge contracts are subject to changes to market interest rates and also could expose us to contingent liabilities and certain risks and costs in the future.
Part of our investment strategy involves entering into interest rate hedging contracts. If interest rates decrease, the fair market value of any existing interest rate hedge contracts would decline. Our efforts to manage exposures under these hedge contracts may not be successful. Our use of interest rate hedge contracts to manage risk associated with interest rate volatility may expose us to additional risks, including the risk that a counterparty to a hedge contract may fail to honor its obligations. Developing an effective interest rate risk strategy is complex and no strategy can completely insulate us from risks associated with interest rate fluctuations. There can be no assurance that our hedging activities will have the desired beneficial impact on our results of operations or financial condition. Termination of interest rate hedge contracts typically involves costs, such as transaction fees or breakage costs.
Further, the cost of using derivative or hedging instruments increases as the period covered by the instrument increases and during periods of rising and volatile interest rates. We may increase our derivative or hedging activity and thus increase our related costs during periods when interest rates are volatile or rising and hedging costs have increased.
In addition, hedging instruments involve risk since they often are not traded on regulated exchanges, guaranteed by an exchange or its clearing house, or regulated by any U.S. or foreign governmental authorities. Consequently, in many cases, there are no requirements with respect to record keeping, financial responsibility or segregation of customer funds and positions. Furthermore, the enforceability of agreements underlying derivative transactions may depend on compliance with applicable statutory and commodity and other regulatory requirements and, depending on the identity of the counterparty, applicable international requirements. The business failure of a hedging counterparty with whom we enter into a hedging transaction will most likely result in a default. Default by a party with whom we enter into a hedging transaction may result in the loss of unrealized profits and force us to cover our resale commitments, if any, at the then current market price. Although generally we will seek to reserve the right to terminate our hedging positions, it may not always be possible to dispose of or close out a hedging position without the consent of the hedging counterparty, and we may not be able to enter into an offsetting contract in order to cover our risk. We cannot be assured that a liquid secondary market will exist for hedging instruments purchased or sold, and we may be required to maintain a position until exercise or expiration, which could result in losses.
Compliance with changing regulation of corporate governance and public disclosure may result in additional expenses.
Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, or the “Sarbanes-Oxley Act,” the Dodd-Frank Wall Street Reform and Consumer Protection Act, new Securities and Exchange Commission regulations and NYSE rules, are creating uncertainty for companies such as ours. These new or changed laws, regulations, and standards are subject to varying interpretations, in many cases due to their lack of specificity. As a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies, which could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We are committed to maintaining high standards of corporate governance and public disclosure. As a result, our efforts to comply with evolving laws, regulations, and standards have resulted in, and are likely to continue to result in, increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities.
Increases in interest rates could increase the amount of our debt payments, adversely affect our ability to pay dividends to our shareholders and could also adversely affect the values of the properties we own.
We expect that we will incur additional indebtedness in the future. Interest we pay could reduce cash available for distributions. Additionally, if we incur variable rate debt, increases in interest rates would increase our interest costs, which would reduce our cash flows and our ability to service indebtedness and, therefore, our ability to pay dividends to you. In addition, if we need to repay existing debt during periods of rising interest rates, we could be required to liquidate one or more of our investments in properties at times which may not permit realization of the maximum return on such investments.

23



We face risks relating to cybersecurity attacks that could cause loss of confidential information and other business disruptions.
We rely extensively on computer systems to manage our business, and our business is at risk from and may be impacted by cybersecurity attacks. These could include attempts to gain unauthorized access to our data and computer systems. Attacks can be both individual and/or highly organized attempts organized by very sophisticated hacking organizations. We employ a number of measures to prevent, detect and mitigate these threats, which include password protection, frequent password change events, firewall detection systems, frequent backups, a redundant data system for core applications and annual penetration testing; however, there is no guarantee such efforts will be successful in preventing a cyber-attack. A cybersecurity attack could compromise the confidential information of our employees, tenants and vendors. A successful attack could disrupt and affect our business operations.
Risks Related to the Real Estate Industry
Our real estate investments are subject to risks particular to real property.
Real estate investments are subject to risks particular to real property, including:
adverse changes in national and local economic and market conditions, including the credit and securitization markets;
changes in governmental laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance with laws and regulations, fiscal policies and ordinances;
takings by condemnation or eminent domain;
real estate conditions, such as an oversupply of or a reduction in demand for real estate space in the area;
economic or physical decline of the areas where the properties are located and deterioration of the physical condition of our properties;
the perceptions of tenants and prospective tenants of the convenience, attractiveness and safety of our properties;
competition from comparable properties;
the occupancy rate of our properties;
the ability to collect on a timely basis all rent from tenants;
the effects of any bankruptcies or insolvencies of major tenants;
the expense of re-leasing space;
changes in interest rates and in the availability, cost and terms of mortgage funding;
the impact of present or future environmental legislation and compliance with environmental laws;
acts of war or terrorism, including the consequences of terrorist attacks;
acts of God, including earthquakes floods and other natural disasters, which may result in uninsured losses; and
cost of compliance with the Americans with Disabilities Act.
If any of these or similar events occur, it may reduce our return from an affected property or investment and reduce or eliminate our ability to make distributions to shareholders.
Liability relating to environmental matters may impact the value of the properties that we may acquire or underlying our investments.
Under various U.S. federal, state and local laws, an owner or operator of real property may become liable for the costs of removal of certain hazardous substances released on its property. These laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release of such hazardous substances. If we fail to disclose environmental issues, we could also be liable to a buyer or lessee of a property.

24



There may be environmental problems associated with our properties which we were unaware of at the time of acquisition. The presence of hazardous substances may adversely affect our ability to sell real estate, including the affected property, or borrow using real estate as collateral. The presence of hazardous substances, if any, on our properties may cause us to incur substantial remediation costs, thus harming our financial condition. In addition, although our leases will generally require our tenants to operate in compliance with all applicable laws and to indemnify us against any environmental liabilities arising from a tenant’s activities on the property, we nonetheless would be subject to strict liability by virtue of our ownership interest for environmental liabilities created by such tenants, and we cannot ensure the shareholders that any tenants we might have would satisfy their indemnification obligations under the applicable sales agreement or lease. To the extent we have environmental insurance to mitigate any of these risks, our coverage may be insufficient. The discovery of material environmental liabilities attached to such properties could have a material adverse effect on our results of operations and financial condition and our ability to make distributions to our shareholders.
Discovery of previously undetected environmentally hazardous conditions, including mold or asbestos, may lead to liability for adverse health effects and costs of remediating the problem could adversely affect our operating results.
Under various U.S. federal, state and local environmental laws, ordinances and regulations, a current or previous owner or operator of real property may be liable for the cost of removal or remediation of hazardous or toxic substances on, under or in such property. The costs of removal or remediation could be substantial. Such laws often impose liability whether or not the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances. Environmental laws also may impose restrictions on the manner in which property may be used or businesses may be operated, and these restrictions may require substantial expenditures. Environmental laws provide for sanctions in the event of noncompliance and may be enforced by governmental agencies or, in certain circumstances, by private parties. Certain environmental laws and common law principles could be used to impose liability for release of and exposure to hazardous substances, including asbestos-containing materials into the air, and third parties may seek recovery from owners or operators of real properties for personal injury or property damage associated with exposure to released hazardous substances. To the extent we have environmental insurance to mitigate any of these risks, our coverage may be insufficient. The cost of defending against claims of liability, of compliance with environmental regulatory requirements, of remediating any contaminated property, or of paying personal injury claims related to any contaminated property could materially adversely affect our business, assets or results of operations and, consequently, amounts available for distribution to our security holders.
Risks Related to Our European Operations
Our Gramercy European Property Fund and Goodman Joint Ventures expose us to additional risk.
We have made capital commitments to joint ventures that target net leased assets across Europe. These investments may be affected by factors particular to the laws of the jurisdiction in which the property is located. These investments expose us to risks that are different from and in addition to those commonly found in the U.S., including:
changing governmental rules and policies;
enactment of laws relating to the foreign ownership of property and laws relating to the ability of foreign entities to remove invested capital or profits earned from activities within the country to the U.S.;
expropriation of investments;
legal systems under which our ability to enforce contractual rights and remedies may be more limited than would be the case under U.S. law;
difficulty in conforming obligations in other countries and the burden of complying with a wide variety of foreign laws, rules and regulations, which may be more stringent than U.S. laws, rules and regulations, including tax requirements and land use, zoning, and environmental laws, as well as changes in such laws;
adverse market conditions caused by changes in national or local economic or political conditions;
tax requirements vary by country and we may be subject to additional taxes as a result of our international investments;
changes in the availability, cost and terms of mortgage funds resulting from varying national economic policies;
changes in real estate and other tax rates and other operating expenses in particular countries;
changes in land use and zoning laws;
more stringent environmental laws or changes in such laws; and

25



restrictions and/or significant costs in repatriating cash and cash equivalents held in foreign bank accounts.
In addition, the lack of publicly available information in certain jurisdictions in accordance with accounting principles generally accepted in the U.S., or GAAP, could impair our ability to analyze transactions and may cause us to forego an investment opportunity. It may also impair our ability to receive timely and accurate financial information from tenants necessary to meet our reporting obligations to financial institutions or governmental or regulatory agencies. Also, we may engage third-party asset managers in international jurisdictions to monitor compliance with legal requirements and lending agreements with respect to properties we own or manage. Failure to comply with applicable requirements may expose us or our operating subsidiaries to additional liabilities.
Moreover, we are subject to changes in foreign exchange rates due to potential fluctuations in exchange rates between foreign currencies and the U.S. dollar. Our principal currency exposure is to the euro. We will attempt to mitigate a portion of the risk of currency fluctuation by financing our properties in the local currency denominations, although there can be no assurance that this will be effective. Because we intend to place both our debt obligation to the lender and the tenant’s rental obligation to us in the same currency, our results of foreign operations benefit from a weaker U.S. dollar and are adversely affected by a stronger U.S. dollar relative to foreign currencies; that is, absent other considerations, a weaker U.S. dollar will tend to increase both our revenues and our expenses, while a stronger U.S. dollar will tend to reduce both our revenues and our expenses.
Risks Related to Our Former CDO Business
Our financial information reflects discontinued operations, in addition to our current business operations, and does not provide a meaningful comparison for period over period results.
As a result of our disposition and deconsolidation in 2013 of certain legacy business operations, our financial results for the year do not just report the results of our ongoing net lease and asset management operations, but also reflect revenues and expenses from discontinued operations. Our business and operations have changed substantially over the past two years, and you should not rely on period over period comparisons of our company, or revenues from discontinued operations, as an indication of future results.
Our retained interests in our CDOs are highly speculative; as a result, there will be uncertainty as to the value of these investments.
Prior to March 2013, certain of our affiliates acted as collateral manager and sub-special servicer for our 2005, 2006 and 2007 collateralized debt obligations (“CDOs” and, collectively, the “Gramercy CDOs”). We retain interests in certain subordinate bonds, preferred shares and ordinary shares in the Gramercy CDOs. These retained interests (the “Retained CDO Bonds”) are highly speculative and subject to high fluctuations in purported value. The fair value of the Retained CDO Bonds, which are not publicly traded, may not be readily determinable. We value the Retained CDO Bonds quarterly. Because such valuations are inherently uncertain, may fluctuate over short periods of time and may be based on estimates, our determinations of fair value may differ materially from the values that would have been used if a ready market for the Retained CDO Bonds existed. There is no guarantee that we will realize any proceeds from our Retained CDO Bonds, or what the timing of those proceeds might be, and the value of our common shares could be adversely affected if our determinations regarding the fair value of the Retained CDO Bonds were materially higher than the values that we ultimately realize upon their disposal.
Our Retained CDO Bonds could generate “phantom” income.
Following the sale of the collateral manager agreements in March 2013, we continue to own the Retained CDO Bonds, which could continue to generate taxable income for us despite the fact that we will not receive cash distributions on our equity and subordinated note holdings from the Retained CDO Bonds until overcollateralization tests are met, if at all. Additionally, following the sale of the collateral manager agreements, we do not control or have influence over the factors that most directly affect the overcollateralization and interest coverage tests of the respective Retained CDO Bonds. Should these Retained CDO Bonds continue to generate taxable income with no corresponding receipt of cash flow, our taxable income would continue to be recognized on each underlying investment in the relevant CDO. We would continue to be required to distribute 90% of our REIT taxable income (determined without regard to the dividends paid deduction and excluding net capital gain) from these transactions to continue to qualify as a REIT, despite the fact that we may not receive cash distributions on our equity and subordinated note holdings from the Retained CDO Bonds.

26



We are exposed to litigation and other risks from our prior roles as collateral manager and sub-special servicer for the Gramercy CDOs.
As collateral manager and sub-special servicer for the Gramercy CDOs, we made investment, loan work-out and other decisions which could result in adverse financial impacts to third-parties. In particular, the discretion that we exercised in managing the collateral for the Gramercy CDOs could result in a liability due to inherent uncertainties surrounding the course of action that will result in the best long-term results with respect to such collateral and investments. This risk could be increased due to the affiliated nature of our roles. In such roles, we could be subject to legal action as a result of these decisions, the outcomes of which cannot be certain and may materially adversely impact our financial condition and results of operations. If we were found liable for our actions as collateral manager or sub-special servicer and we were required to pay significant damages, our financial condition and results of operations could be materially adversely affected.
Risks Related to Our Taxation as a REIT
Our failure to qualify as a REIT would result in higher taxes and reduced cash available for shareholders.
We intend to continue to operate in a manner so as to qualify as a REIT for U.S. federal income tax purposes. Our continued qualification as a REIT depends on our satisfaction of certain asset, income, organizational, distribution and shareholder ownership requirements on a continuing basis. Our ability to satisfy some of the asset tests depends upon the fair market values of our assets, some of which are not able to be precisely determined and for which we will not obtain independent appraisals. If we were to fail to qualify as a REIT in any taxable year, and certain statutory relief provisions were not available, we would be subject to U.S. federal income tax, including any applicable alternative minimum tax, on our taxable income at regular corporate rates, and distributions to shareholders would not be deductible by us in computing our taxable income. Any such corporate tax liability could be substantial and would reduce the amount of cash available for distribution. Unless entitled to relief under certain Internal Revenue Code provisions, we also would be disqualified from taxation as a REIT for the four taxable years following the year during which we ceased to qualify as a REIT. In addition, if we fail to qualify as a REIT, we will no longer be required to make distributions. As a result of all these factors, our failure to qualify as a REIT could impair our ability to expand our business and raise capital, and it would adversely affect the value of our common shares. Even if we qualify as a REIT, we may be may be subject to the corporate alternative minimum tax on our items of tax preference if our alternative minimum taxable income exceeds our taxable income.
REIT distribution requirements could adversely affect our liquidity.
In order to maintain our REIT status and to meet the REIT distribution requirements, we may need to borrow funds on a short-term basis or sell assets, even if the then-prevailing market conditions are not favorable for these borrowings or sales. To qualify as a REIT, we generally must distribute to our shareholders at least 90% of our net taxable income each year, excluding capital gains. In addition, we will be subject to corporate income tax to the extent we distribute less than 100% of our net taxable income including any net capital gain. We intend to make distributions to our shareholders to comply with the requirements of the Internal Revenue Code for REITs and to minimize or eliminate our corporate income tax obligation to the extent consistent with our business objectives. Our cash flows from operations may be insufficient to fund required distributions as a result of differences in timing between the actual receipt of income and the recognition of income for U.S. federal income tax purposes (including, without limitation, taxable income from our Retained CDO Bonds that do not currently produce cash distributions), or the effect of non-deductible capital expenditures, the creation of reserves or required debt service or amortization payments. The insufficiency of our cash flows to cover our distribution requirements could have an adverse impact on our ability to raise short- and long-term debt or sell equity securities in order to fund distributions required to maintain our REIT status. In addition, we will be subject to a 4% nondeductible excise tax on the amount, if any, by which distributions paid by us in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from prior years.
Further, amounts distributed will not be available to fund investment activities. We expect to fund our investments by raising equity capital and through borrowings from financial institutions and the debt capital markets. If we fail to obtain debt or equity capital in the future, it could limit our ability to grow, which could have a material adverse effect on the value of our common shares.
We may incur adverse tax consequences if legacy Chambers failed to qualify as a REIT for United States federal income tax purposes prior to the Merger. 
As a result of the Merger, Legacy Gramercy ceased to exist as a separate REIT and legacy Chambers is the surviving REIT from the Merger but changed its name to Gramercy Property Trust. The new combined entity includes two subsidiary REITs within the Legacy Gramercy structure prior to the Merger.

27



In connection with the closing of the Merger, we received an opinion from Chamber’s counsel to the effect that legacy Chambers qualified to be taxed as a REIT for U.S. federal income tax purposes through the closing date of the Merger. If legacy Chambers failed to qualify as a REIT for U.S. federal income tax purposes prior to the Merger, the new combined company may inherit significant tax liabilities and could even lose its current status as a REIT for U.S. federal income tax purposes. Even if we retain our status as a REIT for U.S. federal income tax purposes, if legacy Chambers is deemed to have lost its status as a REIT for U.S. federal income tax purposes for 2015 or a prior taxable year, we could face significant tax consequences that could substantially reduce our cash available for distribution to our shareholders. In general we are responsible for any corporate income tax liabilities of legacy Chambers, including penalties and interest. We could be required to pay a special distribution and/or employ applicable deficiency dividend procedures (including interest payments to the Internal Revenue Service) to eliminate any earnings and profits accumulated by legacy Chambers for taxable periods that it did not qualify as a REIT.
As a result of these factors, legacy Chamber’s failure before the Merger to qualify as a REIT could impair our ability to expand our business and raise capital, and could materially adversely affect the value of our common shares. Also, if there is an adjustment to legacy Chamber’s REIT taxable income or dividends paid deductions, we could elect to use the deficiency dividend procedure in order to maintain legacy Chamber’s status as a REIT for U.S. federal income tax purposes, but that deficiency dividend procedure could require us to make significant distributions to shareholders and to pay significant interest to the Internal Revenue Service.
In January 2011, and again as a result of the Merger in December 2015, Legacy Gramercy experienced an “ownership change” for purposes of Section 382 of the Internal Revenue Code, which limits our ability to utilize Legacy Gramercy net operating losses and net capital losses against future taxable income, increasing our dividend distribution requirement which could adversely affect our liquidity.
We had substantial net operating and net capital loss carry forwards which we have used to offset our tax and/or distribution requirements. In both January 2011 and December 2015, Legacy Gramercy (including our subsidiary REITs and taxable REIT subsidiaries) experienced an “ownership change” for purposes of Section 382 of the Internal Revenue Code occurred, which limits our ability to use certain Legacy Gramercy losses that the combined company inherited in the Merger. In general, an “ownership change” occurs if there is a change in ownership of more than 50% of our common shares during any cumulative three year period. For this purpose, determinations of ownership changes are generally limited to shareholders deemed to own 5% or more of our common shares. Such a change in ownership may be triggered by regular trading activity in our common shares, which is generally beyond our control. As a result of both the January 2011 and December 2015 “ownership change,” sections 382 and 383 impose an annual limit on the amount of net operating loss and net capital loss carryforward that can be used by us to offset future ordinary taxable income and capital gains, beginning with our 2011 taxable year. Such limitations may increase our dividend distribution requirement, which could adversely affect our liquidity.
Ownership Change under Section 382 of the Internal Revenue Code can have adverse tax consequences.
In addition to the ownership change for Legacy Gramercy as a result of the Merger, in connection with transactions in our common shares from time to time, we may in the future experience an “ownership change” within the meaning of Section 382 of the Internal Revenue Code. Calculating whether a Section 382 ownership change has occurred is subject to uncertainties, including the complexity and ambiguity of Section 382 and limitations on a publicly traded company’s knowledge as to the ownership of, and transactions in, its securities. If an ownership change were to occur, our ability to use certain tax attributes, including net operating losses and net capital losses and other credits, deductions or tax basis, may be limited, which could have an adverse impact on our business.

28



Complying with REIT requirements may limit our ability to hedge effectively.
The existing REIT provisions of the Internal Revenue Code may limit our ability to hedge our operations. Except to the extent provided by Treasury regulations, any income from a hedging transaction where the instrument hedges interest rate risk on liabilities used to carry or acquire real estate or hedges risk of currency fluctuations with respect to any item of income or gain that would be qualifying income under the 75% or 95% gross income tests will be excluded from gross income for purposes of the 75% and 95% gross income tests. To qualify the preceding sentence, the hedging transaction must be clearly identified as specified in Treasury regulations before the close of the day on which it was acquired, originated or entered into. To the extent that we enter into other types of hedging transactions, the income from those transactions is likely to be treated as non-qualifying income for purposes of both of the gross income tests. In addition, we must limit our aggregate income from non-qualified hedging transactions, from our provision of services and from other non-qualifying sources, to less than 5% of our annual gross income (determined without regard to gross income from qualified hedging transactions). As a result, we may have to limit our use of certain hedging techniques or implement those hedges through TRS entities. This could result in greater risks associated with changes in interest rates than we would otherwise want to incur or could increase the cost of our hedging activities. If we fail to satisfy the 75% or 95% limitations, we could lose our REIT qualification for U.S. federal income tax purposes, unless our failure was due to reasonable cause and not due to willful neglect, and we meet certain other technical requirements. Even if our failure was due to reasonable cause, we might incur a penalty tax.
The share ownership limit imposed by the Internal Revenue Code for REITs and our charter may inhibit market activity in our shares and may restrict our business combination opportunities.
In order for us to maintain our qualification as a REIT under the Internal Revenue Code, not more than 50% in value of our outstanding shares may be owned, directly or indirectly, by five or fewer individuals (as defined in the Internal Revenue Code to include certain entities) at any time during the last half of each taxable year. Additionally, at least 100 persons must beneficially own our capital shares during at least 335 days of a taxable year for each taxable year. Our charter, with certain exceptions, authorizes our trustees to take such actions as are necessary and desirable to preserve our qualification as a REIT. Unless exempted by the board of trustees, no person may own more than 9.8% of the aggregate value of our outstanding shares or more than 9.8% in value or in number of shares, whichever is more restrictive, of the outstanding common shares. The board of trustees may not grant such an exemption to any proposed transferee whose ownership of in excess of 9.8% of the value of our outstanding shares or more than 9.8% in value or in number of shares, whichever is more restrictive, of the outstanding common shares, would result in the termination of our status as a REIT. These ownership limits could delay or prevent a transaction or a change in our control that might be in the best interest of our shareholders.
Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends.
The maximum tax rate applicable to “qualified dividend income” payable to U.S. shareholders that are taxed at individual rates is 20%. Dividends payable by REITs, however, generally are not eligible for the reduced rates on qualified dividend income. The more favorable rates applicable to regular corporate qualified dividends could cause investors who taxed at individual rates to perceive investments in REITs to be relatively less attractive than investments in the shares of non-REIT corporations that pay dividends, which could adversely affect the value of the shares of REITs, including our common shares.
The tax on prohibited transactions will limit our ability to engage in transactions, including how we sell our real estate properties, which may inhibit our ability to sell non-core properties pursuant to our desired asset disposition plan.
A REIT’s gain from prohibited transactions is subject to a 100% tax. In general, prohibited transactions are sales or other dispositions of property, other than foreclosure property, held primarily for sale to customers in the ordinary course of business.
Whether property is held as inventory or primarily for sale to customers in the ordinary course of a trade or business is a question of fact that depends on all the facts and circumstances surrounding the particular transaction.  There can be no assurance as to whether or not the Internal Revenue Service might successfully assert that one or more of our dispositions is subject to the 100% penalty tax.  The Internal Revenue Code provide a safe-harbor pursuant to which limited sales of real property held for at least two years and meeting specified additional requirements will not be treated as prohibited transactions, but fitting within the safe harbor rules limits our operational flexibility.
We will attempt to comply with the terms of the safe-harbor provisions in the Internal Revenue Code prescribing when a property sale will not be characterized as a prohibited transaction. We cannot make any assurances, however, that we can comply with the safe-harbor provisions or that we will avoid owning property that may be characterized as property that we hold primarily for sale to customers in the ordinary course of a trade or business.

29



We may be unable to generate sufficient revenue from operations, operating cash flow or portfolio income to pay our operating expenses, and our operating expenses could rise, diminishing our ability and to pay distributions to our shareholders.
As a REIT, we are generally required to distribute at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and not including net capital gains, each year to our shareholders. To qualify for the tax benefits accorded to REITs, we have and intend to continue to make distributions to our shareholders in amounts such that we distribute all or substantially all our net taxable income each year, subject to certain adjustments. However, our ability to make distributions may be adversely affected by the risk factors described herein. Our ability to make and sustain cash distributions is based on many factors, including the return on our investments, the size of our investment portfolio, operating expense levels, and certain restrictions imposed by Maryland law. Some of the factors are beyond our control and a change in any such factor could affect our ability to pay future dividends. No assurance can be given as to our ability to pay distributions to our shareholders. In the event of a downturn in our operating results and financial performance or unanticipated declines in the value of our asset portfolio, we may be unable to declare or pay quarterly distributions or make distributions to our shareholders. The timing and amount of distributions are in the sole discretion of our board of trustees, which considers, among other factors, our earnings, financial condition, debt service obligations and applicable debt covenants, REIT qualification requirements and other tax considerations and capital expenditure requirements as our board of trustees may deem relevant from time to time.
Although our use of TRSs may be able to partially mitigate the impact of meeting the requirements necessary to maintain our qualification as a REIT, our ownership of and relationship with our TRSs will be limited, and a failure to comply with the limits would jeopardize our REIT qualification and may result in the application of a 100% excise tax.
A REIT may own up to 100% of the shares of one or more TRSs. A TRS generally may hold assets and earn income that would not be qualifying assets or income if held or earned directly by a REIT. Both the subsidiary and the REIT must jointly elect to treat the subsidiary as a TRS. A corporation of which a TRS directly or indirectly owns more than 35% of the voting power or value of the shares will automatically be treated as a TRS. Overall, no more than 25% (and starting in 2018 no more than 20%) of the value of a REIT’s assets may consist of shares or securities of one or more TRSs. In addition, the TRS rules limit the deductibility of interest paid or accrued by a TRS to its parent REIT to assure that the TRS is subject to an appropriate level of corporate taxation. The rules also impose a 100% excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm’s-length basis.
We own certain investments and conduct certain operations through TRSs, which pay U.S. federal, state and local income tax on their taxable income, and their after-tax net income will be available for distribution to us but will not be required to be distributed to us. We anticipate that the aggregate value of TRS securities owned by us will be less than 25% of the value of our total assets (including such TRS securities). Furthermore, we will monitor the value of our respective investments in our TRSs for the purpose of ensuring compliance with the rule that no more than 25% (or 20% starting in 2018) of the value of a REIT’s assets may consist of TRS securities (which is applied at the end of each calendar quarter). In addition, we will scrutinize all of our transactions with our TRSs for the purpose of ensuring that they are entered into on arm’s-length terms in order to avoid incurring the 100% excise tax described above. The value of the securities that we hold in our TRSs may not be subject to precise valuation. Accordingly, there can be no complete assurance that we will be able to comply with the 25%, limitation discussed above or avoid application of the 100% excise tax discussed above.
We may be subject to adverse legislative or regulatory tax changes that could reduce the market price of our common shares.
At any time, the U.S. federal income tax laws governing REITs or the administrative interpretations of those laws may be amended. We cannot predict when or if any new U.S. federal income tax law, regulation or administrative interpretation, or any amendment to any existing U.S. federal income tax law, regulation or administrative interpretation, will be adopted, promulgated or become effective and any such law, regulation, or interpretation may take effect retroactively. We and our shareholders could be adversely affected by any such change in the U.S. federal income tax laws, regulations or administrative interpretations.

30



If either of the Operating Partnerships failed to qualify as a partnership for federal income tax purposes, we would cease to qualify as a REIT and suffer other adverse consequences.
We believe that the Operating Partnership will be treated as a partnership for federal income tax purposes. As a partnership, each Operating Partnership will not be subject to federal income tax on its income. Instead, each of its partners, including us, will be allocated, and may be required to pay tax with respect to, its share of the Operating Partnership’s income. We cannot assure you, however, that the Internal Revenue Service will not challenge the status of the Operating Partnership or any other subsidiary partnership in which we own an interest as a partnership for federal income tax purposes, or that a court would not sustain such a challenge. If the Internal Revenue Service were successful in treating the Operating Partnership or any such other subsidiary partnership as an entity taxable as a corporation for federal income tax purposes, we would fail to meet the gross income tests and certain of the asset tests applicable to REITs and, accordingly, we would likely cease to qualify as a REIT. Also, the failure of the Operating Partnership or any subsidiary partnerships to qualify as a partnership could cause it to become subject to federal and state corporate income tax, which would reduce significantly the amount of cash available for debt service and for distribution to its partners, including us.
Risks Related to Our Organization and Structure
Maryland takeover statutes could restrict a change of control, which could have the effect of inhibiting a change in control even if a change in control were in our shareholders' interests.
Under the Maryland General Corporate Law (the "MGCL") as applicable to REITs, certain "business combinations" between a Maryland REIT and an interested shareholder or an affiliate of an interested shareholder are prohibited for five years after the most recent date on which the interested shareholder becomes an interested shareholder. These business combinations include a merger, consolidation, share exchange, or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities. An interested shareholder is defined as:
any person who beneficially owns 10% or more of the voting power of our outstanding voting shares; or
an affiliate or associate of the Company who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of our then outstanding shares.
A person is not an interested shareholder under the statute if our board of trustees approves in advance the transaction by which he otherwise would have become an interested shareholder.
After the five-year prohibition, any business combination between the Maryland REIT and an interested shareholder generally must be recommended by our board of trustees and approved by the affirmative vote of at least:
80% of the votes entitled to be cast by holders of our outstanding voting shares; and
two-thirds of the votes entitled to be cast by holders of our outstanding voting shares other than shares held by the interested shareholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested shareholder.
The business combination statute may discourage others from trying to acquire control of us and increase the difficulty of consummating any offer, including potential acquisitions that might involve a premium price for our common shares or otherwise be in the best interests of our shareholders.
Our board of trustees has adopted a resolution exempting the Company from the provisions of the MGCL relating to business combinations with interested shareholders or affiliates of interested shareholders. However, such resolution can be altered or repealed, in whole or in part, at any time by our board of trustees. If such resolution is repealed, the business combination statute could have the effect of discouraging offers to acquire us and of increasing the difficulty of consummating these offers, even if our acquisition would be in our shareholders' best interests.
Certain provisions of the MGCL applicable to Maryland real estate investment trusts permit our board of trustees, without shareholder approval and regardless of what is currently provided in our declaration of trust or bylaws, to adopt certain mechanisms, some of which (for example, a classified board) we do not have. These provisions may have the effect of limiting or precluding a third party from making an acquisition proposal for us or of delaying, deferring or preventing a change in our control under circumstances that otherwise could provide the holders of our common shares with the opportunity to realize a premium over the then current market price.

31



The MGCL also limits the ability of a third-party to buy a large stake in us and exercise voting power in electing trustees.
The MGCL, as applicable to REITs, provides that "control shares" of a Maryland REIT acquired in a "control share acquisition" have no voting rights except to the extent approved by a vote of two-thirds of the votes entitled to be cast on the matter, excluding shares owned by the acquiror, by officers or by trustees who are employees of the corporation. "Control shares" are voting shares that would entitle the acquirer to exercise voting power in electing trustees within specified ranges of voting power. Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained shareholder approval. A "control share acquisition" means the acquisition of issued and outstanding control shares, subject to certain exceptions. The control share acquisition statute does not apply (i) to shares acquired in a merger, consolidation or share exchange if we are a party to the transaction, or (ii) to acquisitions approved or exempted by our declaration of trust or bylaws. Our bylaws contain a provision exempting from the control share acquisition statute any and all acquisitions by any person of our shares. We cannot assure you that such provision will not be amended or eliminated at any time in the future. If such provision is eliminated, the control share acquisition statute could have the effect of discouraging offers to acquire us and increasing the difficulty of consummating any such offers, even if our acquisition would be in our shareholders' best interests.
Our authorized but unissued preferred shares may prevent a change in our control which could be in the shareholders’ best interests.
Our charter authorizes us to issue additional authorized but unissued common or preferred shares. Any such issuance could dilute our existing shareholders’ interests. In addition, the board of trustees may classify or reclassify any unissued common or preferred shares into other classes or series of shares and may set the preferences, rights and other terms of the classified or reclassified shares. As a result, the board of trustees may establish a class or series of preferred shares that could delay or prevent a transaction or a change in control that might be in the best interest of our shareholders.
We may change our investment and operational policies without shareholder consent.
We may change our investment and operational policies, including our policies with respect to investments, acquisitions, growth, operations, indebtedness, capitalization and distributions, at any time without the consent of our shareholders, which could result in our making investments that are different from, and possibly riskier than, the types of investments described in this filing. A change in our investment strategy may increase our exposure to interest rate risk, default risk and real estate market fluctuations, all of which could adversely affect our ability to make distributions.
We may in the future choose to pay dividends in our own shares, in which case you may be required to pay income taxes in excess of the cash dividends you receive.
We may in the future distribute taxable dividends that are payable in cash and common shares at the election of each shareholder. Taxable shareholders receiving such dividends will be required to include the full amount of the dividend as ordinary income to the extent of our current and accumulated earnings and profits for United States federal income tax purposes. As a result, a U.S. shareholder may be required to pay income taxes with respect to such dividends in excess of the cash dividends received. If a U.S. shareholder sells the shares it receives as a dividend in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the dividend, depending on the market price of our shares at the time of the sale. Furthermore, with respect to non-U.S. shareholders, we may be required to withhold U.S. tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in shares. In addition, if a significant number of our shareholders determine to sell common shares in order to pay taxes owed on dividends, it may put downward pressure on the trading price of our common shares.
Risks Related to Ownership of Common Shares
Future sales of common shares in the public market or the issuance of other equity may adversely affect the market price of our common shares.
Sales of a substantial number of common shares or other equity-related securities in the public market could depress the market price of our common shares, and impair our ability to raise capital through the sale of additional equity securities. We cannot predict the effect that future sales of common shares or other equity-related securities would have on the market price of our common shares.

32



The price of our common shares may fluctuate significantly.
The trading price of our common shares may fluctuate significantly in response to many factors, including:
actual or anticipated variations in our operating results, funds from operations, or FFO, cash flows, liquidity or distributions;
changes in our earnings estimates or those of analysts;
publication of research reports about it or the real estate industry or sector in which we operate;
increases in market interest rates that lead purchasers of our shares to demand a higher dividend yield;
changes in market valuations of companies similar to us;
adverse market reaction to any securities we may issue or additional debt it incurs in the future;
additions or departures of key management personnel;
actions by institutional shareholders;
speculation in the press or investment community;
continuing high levels of volatility in the credit markets;
the realization of any of the other risk factors included herein; and
general market and economic conditions.
The availability and timing of cash distributions is uncertain.
We are generally required to distribute to its shareholders at least 90% of its REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gain, each year in order for us to qualify as a REIT under the Code, which we intend to satisfy through quarterly cash distributions of all or substantially all of our REIT taxable income in such year, subject to certain adjustments.
Our board of trustees will determine the amount and timing of any distributions. In making such determinations, our trustees will consider all relevant factors, including the amount of cash available for distribution, capital expenditures, general operational requirements and applicable law. We intend over time to make regular quarterly distributions to holders of our common shares. However, we bear all expenses incurred by our operations, and the funds generated by operations, after deducting these expenses, may not be sufficient to cover desired levels of distributions to shareholders. In addition, our board of trustees, in its discretion, may retain any portion of such cash in excess of our REIT taxable income for working capital. We cannot predict the amount of distributions we may make, maintain or increase over time.
There are many factors that can affect the availability and timing of cash distributions to shareholders. Because we may receive rents and income from our properties at various times during our fiscal year, distributions paid may not reflect our income earned in that particular distribution period. The amount of cash available for distribution will be affected by many factors, including without limitation, the amount of income we will earn from investments in target assets, the amount of its operating expenses and many other variables. Actual cash available for distribution may vary substantially from our expectations.
While we intend to fund the payment of quarterly distributions to holders of common shares entirely from distributable cash flows, we may fund quarterly distributions to its shareholders from a combination of available net cash flows, equity capital and proceeds from borrowings. In the event we are unable to consistently fund future quarterly distributions to shareholders entirely from distributable cash flows, the value of our common shares may be negatively impacted.

33



An increase in market interest rates may have an adverse effect on the market price of our common shares and our ability to make distributions to its shareholders.
One of the factors that investors may consider in deciding whether to buy or sell common shares is our distribution rate as a percentage of our share price, relative to market interest rates. If market interest rates increase, prospective investors may demand a higher distribution rate on common shares or seek alternative investments paying higher distributions or interest. As a result, interest rate fluctuations and capital market conditions can affect the market price of common shares. For instance, if interest rates rise without an increase in our distribution rate, the market price of common shares could decrease because potential investors may require a higher distribution yield on common shares as market rates on interest-bearing instruments such as bonds rise. In addition, to the extent we have variable rate debt, rising interest rates would result in increased interest expense on our variable rate debt, thereby adversely affecting our cash flow and its ability to service our indebtedness and make distributions to our shareholders.
SPECIAL NOTE REGARDING EXHIBITS
In reviewing the agreements included as exhibits to this Annual Report on Form 10-K, please remember they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about our company or the other parties to the agreements. The agreements contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and:
should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk tone of the parties if those statements prove to be inaccurate;
have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;
may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and
were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.
Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information about our company may be found elsewhere in this Annual Report on Form 10-K and our other public filings, which are available without charge through the SEC’s website at http://www.sec.gov. See Item 1, “Business - Corporate Governance and Internet Address; Where Readers Can Find Additional Information.”
ITEM 1B.
UNRESOLVED STAFF COMMENTS
As of the date of this filing, we do not have any unresolved comments with the staff of the SEC.

34



ITEM 2.
PROPERTIES (Dollar amounts in thousands, except square feet and dollar per square foot amounts)
Our corporate headquarters are located in midtown Manhattan at 521 Fifth Avenue, 30th Floor, New York, New York 10175. We also have regional offices located in London, United Kingdom, Horsham, Pennsylvania, Clayton, Missouri, Los Angeles, California, and Princeton, New Jersey.
Current Property Portfolio
As of December 31, 2015, we owned interests, either directly or through an unconsolidated equity investment, in 323 properties containing an aggregate of approximately 63.0 million rentable square feet. The following table provides information about the properties in our portfolio as of December 31, 2015:
GPT PORTFOLIO:
Number of Properties
 
Location
 
Tenant(s)
 
Leased
Square
Feet
 
Contractual Base Rent Per Square Foot(1)
 
Term
Expiry(2)
Industrial Properties
 
 

 
 

 
 

 
1
 
Greenwood, IN
 
Nestle Waters North America
 
294,388

 
$
3.50

 
07/31/24

 
1
 
Greenfield, IN
 
Stanley Security Solutions
Harlan Laboratories, Inc.
 
245,041

 
$
5.12

 
02/13/22
12/31/23

 
1
 
Olive Branch, MS
 
Five Below, Inc.
 
605,427

 
$
2.85

 
12/31/23

(4) 
1
 
Garland, TX
 
Apex Tool Group, LLC
 
341,840

 
$
2.23

 
10/31/32

 
1
 
Bellmawr, NJ
 
Federal Express Corporation
 
62,230

 
$
4.89

 
10/31/22

 
1
 
Hialeah Gardens, FL
 
Preferred Freezer Services
 
117,591

 
$
17.89

 
05/31/39

 
1
 
Swedesboro, NJ
 
Albert's Organics, Inc.
 
70,000

 
$
10.72

 
05/31/28

 
1
 
Atlanta, GA
 
KapStone Paper and Packaging Corporation
 
133,317

 
$
2.71

 
04/30/23

 
1
 
Manassas, VA
 
Retrievex Acquisition Corp. V
 
40,018

 
$
7.50

 
12/31/24

 
1
 
Manassas, VA
 
Retrievex Acquisition Corp. V
 
43,047

 
$
7.50

 
12/31/24

 
1
 
Yuma, AZ
 
Earthbound Holdings II, LLC
 
216,727

 
$
6.79

 
09/30/33

 
1
 
Austin, TX
 
Angelica Textile Services, Inc.
 
120,347

 
$
6.03

 
10/31/28

 
1
 
Galesburg, IL
 
Euclid Beverage, Ltd
 
52,700

 
$
3.61

 
10/09/21

 
1
 
Lawrence, IN
 
EF Transit, Inc.
 
534,769

 
$
5.42

 
06/30/24

 
1
 
Peru, IL
 
Euclid Beverage Ltd
 
78,100

 
$
7.28

 
06/09/22

 
1
 
Waco, TX
 
Associated Hygienic Products, LLC
 
303,000

 
$
6.90

 
07/31/29

 
1
 
Allentown, PA
 
Amcor Rigid Plastics USA, LLC
 
480,000

 
$
5.29

 
12/23/28

 
2
 
Los Angeles, CA
 
Douglas Steel Supply Co.
 
120,506

 
$
7.92

 
12/31/28

 
1
 
Des Plaines, IL
 
Filtran, LLC
 
115,472

 
$
4.29

 
10/31/25

 
1
 
Elgin, IL
 
Dynacast, LLC
 
112,325

 
$
7.52

 
08/31/28

 
1
 
Harrisburg, PA
 
Cummins, Inc.
 
183,200

 
$
3.25

 
05/31/25

 
1
 
Elk Grove Village, IL
 
Hearthside Holdco, LLC
 
309,284

 
$
4.55

 
12/31/23

 
1
 
Tampa, FL
 
Cott Beverages Inc.
 
175,920

 
$
4.21

 
01/31/20

 
1
 
Ames, IA
 
Jacobson Warehouse Company, Inc.
Strategic Warehousing, LLC
Amcor Rigid Plastics USA, Inc.
 
576,876

 
$
3.87

 
12/31/16
12/31/16
12/31/20

 
1
 
Buford, GA
 
Office Depot, Inc.
 
550,000

 
$
5.08

 
04/30/20

 
1
 
Wilson, NC
 
Cott Beverages, Inc.
 
328,000

 
$
3.70

 
05/31/26

 
1
 
Arlington Heights, IL
 
European Imports Ltd
 
186,954

 
$
8.36

 
05/31/19

 
1
 
Bloomington, IL
 
Compass Group USA, INC.
 
110,063

 
$
4.43

 
07/31/24

 
1
 
Kenosha, WI
 
Emerson Electric Co.
 
160,300

 
$
4.69

 
09/30/24

 
1
 
Worcester, MA
 
Polar Corp
 
285,437

 
$
5.55

 
03/31/29

 
1
 
Miami, FL
 
International Data Depository Inc
 
187,749

 
$
4.24

 
10/31/21

 
1
 
Morrow, GA
 
Global Stainless Supply, Inc.
 
203,850

 
$
2.40

 
01/20/20

 

35



Number of Properties
 
Location
 
Tenant(s)
 
Leased
Square
Feet
 
Contractual Base Rent Per Square Foot(1)
 
Term
Expiry(2)
1
 
Midway, GA
 
Pacific Global Logistics Inc
 
502,854

 
$
2.67

 
01/31/19

 
1
 
Puyallup, WA
 
Saint-Gobain Abrasives, Inc.
 
108,644

 
$
6.31

 
02/29/24

 
1
 
Lewisville, TX
 
E.A. Sween Company
Compudata Products Inc
 
115,459

 
$
4.55

 
11/30/18
05/31/28

 
1
 
Rolling Meadows, IL
 
J.C. Restoration, Inc.
 
93,614

 
$
7.91

 
12/03/26

 
1
 
Groveport, OH
 
Almo Distributing Pennsylvania Inc
 
240,000

 
$
2.42

 
03/31/18

 
1
 
Buffalo Grove, IL
 
CrossCom National LLC
 
60,014

 
$
6.14

 
12/31/21

 
1
 
Burr Ridge, IL
 
Harry Holland & Son, Inc.
 
47,000

 
$
7.29

 
02/29/20

 
1
 
Downers Grove, IL
 
Valid USA, Inc.
 
109,000

 
$
6.22

 
09/30/29

 
1
 
Hamlet, NC
 
Henry's Tackle LLC
 
310,673

 
$
3.20

 
05/30/24

 
1
 
Bolingbrook, IL
 
Valid USA, Inc
 
225,203

 
$
4.00

 
05/31/29

 
1
 
Cinnaminson, NJ
 
Domtar Paper Company, LLC
 
465,000

 
$
3.55

 
04/30/25

 
1
 
St Louis, MO
 
Alpha Plastics, Inc.
 
211,000

 
$
3.95

 
09/30/29

 
1
 
Sussex, WI
 
Quad/Graphics, Inc.
 
192,160

 
$
3.71

 
09/30/17

 
1
 
Milwaukee, WI
 
Ball Metal Beverage Container Corp
 
110,400

 
$
3.80

 
07/31/16

 
1
 
Oak Creek, WI
 
United States Postal Service
 
150,192

 
$
3.74

 
09/30/19

 
1
 
Kent, WA
 
Cenveo Corporation
 
214,970

 
$

 
11/30/22

 
1
 
San Jose, CA
 
Vander-Bend Manufacturing, LLC
 
207,006

 
$
13.32

 
10/31/27

 
1
 
Richfield, OH
 
FedEx Ground Package Systems Inc.
 
229,972

 
$
7.97

 
09/30/21

 
4
 
Houston, TX
 
CEVA Freight, LLC
 
465,475

 
$
10.22

 
12/31/17

 
1
 
Aurora, CO
 
CEVA Freight, LLC
 
84,973

 
$
6.92

 
12/31/17

 
1
 
Dixon, IL
 
Spectrum Brands, Inc
 
575,448

 
$
3.00

 
02/28/28

 
1
 
Oswego, IL
 
Radiac Abrasives, Inc.
 
74,960

 
$
5.25

 
05/14/22

 
1
 
Obetz, OH
 
Nautilus, Inc.
 
478,053

 
$
3.39

 
07/31/21

 
1
 
Auburn, WA
 
Gerdau Reinforcing Steel
 
109,585

 
$
7.67

 
10/31/21

 
1
 
Fairfield, CA
 
Gerdau Reinforcing Steel
 
59,000

 
$
5.08

 
01/31/23

 
1
 
San Bernardino, CA
 
Gerdau Reinforcing Steel
 
69,452

 
$
8.19

 
02/29/16

 
1
 
Philadelphia, PA
 
Penn Jersey Paper Co.
 
255,336

 
$
7.47

 
04/30/26

 
1
 
Orlando, FL
 
Kratos Defense & Security Solutions, Inc.
 
92,616

 
$
8.84

 
07/17/20

 
1
 
Orlando, FL
 
Magical Cruise Company, Limited
 
141,668

 
$
3.80

 
05/31/21

 
1
 
Vernon, CA
 
Mikawaya
 
106,631

 
$
16.80

 
06/30/30

 
1
 
Fridley, MN
 
BAE Systems Land & Armaments L.P.
 
585,225

 
$
5.78

 
11/30/25

 
1
 
Pinellas Park, FL
 
Davidoff of Geneva USA Inc.
 
131,800

 
$
5.85

 
09/30/30

 
1
 
Norcross, GA
 
Deutz Corporation
 
142,073

 
$
3.83

 
10/31/25

 
1
 
Norcross, GA
 
Granquartz, LP
 
80,000

 
$

 
12/31/22

 
1
 
Round Rock, TX
 
Proportion Foods, LLC
 
200,411

 
$

 
12/31/2030

 
1
 
Hackettstown, NJ
 
Astrodyne Corporation
 
150,500

 
$
6.50

 
12/31/35

 
2
 
Nashville, TN
 
PTB, LLC
 
152,600

 
$
2.86

 
12/22/35

 
1
 
La Vergne, TN
 
PTB, LLC
 
225,000

 
$
2.86

 
12/22/35

 
1
 
Dallas, TX
 
Nassau Candy Southwest, LLC
Synnex Corporation
 
120,000

 
$
3.90

 
5/31/2018

 
1
 
Dallas, TX
 
Cintas - R.U.S. LP
Allen Baseball Holdings, LLC
Standex International Corporation
Texas Valve & Fitting Company LLC
 
100,000

 
$
5.30

 
04/18/18
09/30/18
02/28/19
03/31/24

 
1
 
Dallas, TX
 
LSA - Cleanpart Texas, L.P.
Assa Abloy Hospitality, Inc.
 
73,112

 
$
3.40

 
04/30/21
07/31/21

 
1
 
Chicago, IL
 
Compass Group USA, Inc.
Illinois Industrial Tool, Inc.
 
185,045

 
$
6.16

 
10/31/16
03/31/17

 
1
 
Spartanburg, SC
 
Dish Network L.L.C.
 
316,491

 
$
3.99

 
09/30/19

 
1
 
Spartanburg, SC
 
Magna Exteriors and Interiors USA, Inc.
 
101,055

 
$
4.50

 
08/31/20

 

36



Number of Properties
 
Location
 
Tenant(s)
 
Leased
Square
Feet
 
Contractual Base Rent Per Square Foot(1)
 
Term
Expiry(2)
1
 
Spartanburg, SC
 
Smilemakers, Inc.
 
101,459

 
$
3.48

 
09/30/17

 
1
 
Spartanburg, SC
 
International Automotive Components Group North America, Inc.
 
70,000

 
$
4.52

 
06/30/18

 
1
 
Charleston, SC
 
Meadwestvaco Corporation, a Delaware Corp.
 
284,750

 
$
3.30

 
05/31/25

 
1
 
Charleston, SC
 
Continental Terminals of SC, Inc.
 
101,705

 
$
4.95

 
11/30/17

 
1
 
Charleston, SC
 
Vital Records Control of South Carolina, Inc.
 
79,972

 
$
4.84

 
08/31/20

 
1
 
Charleston, SC
 
Trans-Hold Inc.
 
316,040

 
$
3.94

 
01/31/22

 
1
 
Charleston, SC
 
Husqvarna Professional Products, Inc.
 
451,370

 
$
4.20

 
12/31/18

 
1
 
Charleston, SC
 
Menlo Logistics, Inc.
 
100,823

 
$
2.77

 
01/31/19

 
1
 
Charleston, SC
 
Allied Air Enterprises LLC
 
101,055

 
$
4.00

 
08/31/18

 
1
 
Charlotte, NC
 
Major Metals Company
 
100,000

 
$
3.98

 
MTM

 
1
 
Charlotte, NC
 
Southeastern Container, Inc.
 
301,400

 
$
3.03

 
12/31/19

 
1
 
Winston-Salem, NC
 
The Clearing House Payments Company, Inc
 
100,853

 
$
4.74

 
12/31/28

 
1
 
Winston-Salem, NC
 
MOM Brands Company
 
316,130

 
$
3.69

 
11/30/19

 
1
 
Spartanburg, SC
 
ThyssenKrupp Materials NA, Inc
 
51,028

 
$
4.13

 
09/30/17

 
1
 
Spartanburg, SC
 
CIRCOR Instrumentation Technologies, Inc.
 
104,160

 
$
5.91

 
09/30/19

 
1
 
Spartanburg, SC
 
Magna Exteriors and Interiors USA, Inc.
 
125,000

 
$
3.27

 
01/31/19

 
1
 
Spartanburg, SC
 
Beauty Systems Group, LLC
 
190,606

 
$
4.25

 
05/31/23

 
1
 
Spartanburg, SC
 
Rochling Automotive USA, LLP
 
150,000

 
$
3.85

 
12/31/21

 
1
 
Spartanburg, SC
 
Pitney Bowes Presort Services, Inc.
 
30,000

 
$
3.34

 
01/31/17

 
1
 
Spartanburg, SC
 
Fehrer Automotive North America, LLC
 
93,971

 
$
3.49

 
12/31/21

 
1
 
Spartanburg, SC
 

 

 
$

 
 
 
1
 
Spartanburg, SC
 
AFL Telecommunications, LLC
 
67,375

 
$
4.46

 
07/31/20

 
4
 
Spartanburg, SC
 
McAleer Holdings, LLC
New Cingular Wireless PCS, LLC
Rank Distributors, LLC
McAleer Holdings, LLC
 
385,115

 
$
0.97

 
12/31/19
01/31/21
10/31/23
MTM

 
1
 
Spartanburg, SC
 
Innovative Fibers, LLC
 
116,413

 
$
2.40

 
11/30/20

 
1
 
Duncan, SC
 
Coyne International Enterprises Corp.
d/b/a Coyne Textile Services
 
100,000

 
$
3.30

 
06/30/16

 
1
 
Duncan, SC
 
TW-Fitting-NA, LLC
 
105,000

 
$
3.13

 
12/31/20

 
1
 
Charlotte, NC
 
Bay Valley Foods, LLC
Parkway Advertising Corporation
 
541,910

 
$
2.95

 
05/31/21
MTM

 
1
 
Minneapolis, MN
 
 
 

 
$

 
 
 
1
 
Boston, MA
 
Best Buy Warehousing Logistics, Inc.
 
238,370

 
$
7.45

 
07/31/19

 
1
 
Jacksonville, FL
 
Dr Pepper / Seven up, Inc.
 
601,500

 
$
4.47

 
04/30/26

 
1
 
Dallas, TX
 
ConAgra Packaged Foods, LLC.
XTO Resources I, LP
 
420,360

 
$
4.27

 
04/30/25
MTM

 
1
 
Hebron, KY
 
Verst Group Logistics Inc.
 
189,400

 
$
3.14

 
06/30/18

 
1
 
St. Augustine, FL
 
ConAgra Foods Packaged Foods, LLC
 
321,500

 
$
5.07

 
07/31/19

 
1
 
Phoenix, AZ
 
Record Xpress of California, LLC
Menlo Logistics, Inc.
Duro Hilex Poly, LLC
 
169,264

 
$
3.11

 
03/31/17
07/31/17
01/31/20

 
1
 
Dallas, TX
 
Whirlpool Corporation
 
1,020,000

 
$
3.30

 
05/31/21

 
1
 
Denver, CO
 
Subaru of America, Inc.
 
406,959

 
$
4.30

 
08/31/21

 
1
 
Chicago, IL
 
The Clorox International Company
 
1,350,000

 
$
3.39

 
08/31/21

 
1
 
Kansas City, KS
 
The Coleman Company, Inc.
 
1,107,000

 
$
4.30

 
01/31/20

 
1
 
Minneapolis, MN
 
Archway Marketing Services, Inc.
 
280,577

 
$
6.00

 
01/31/26

 
1
 
Baltimore, MD
 
Noxell Corporation
 
800,797

 
$
3.97

 
03/31/23

 
1
 
Baltimore, MD
 
Atlantic Auctions, LLC
 
3,400

 
$
0.48

(3) 
03/31/21

 
1
 
Baltimore, MD
 
Bob's Discount Furniture, LLC
 
672,000

 
$
4.70

 
07/31/25

 
1
 
Goodyear, AZ
 
Amazon.Com.Azdc, Inc.
 
820,384

 
$
5.51

 
09/30/19

 

37



Number of Properties
 
Location
 
Tenant(s)
 
Leased
Square
Feet
 
Contractual Base Rent Per Square Foot(1)
 
Term
Expiry(2)
1
 
Spartanburg, SC
 
Lear Operations Corporation
 
156,800

 
$
5.65

 
04/30/19

 
1
 
Indianapolis, IN
 
The Hartz Mountain Corporation
 
622,440

 
$
3.13

 
12/31/23

 
1
 
Hawthorne, CA
 
Space Exploration Technologies Corp.
 
533,781

 
$
6.27

 
01/31/23

 
1
 
East Saint Louis, IL
 
Medline Industries, Inc.
Stellar Manufacturing Company
 
502,500

 
$
3.24

 
07/31/19
01/31/20

 
1
 
Pittston / Wilkes-Barre, PA
 
Kimberly-Clark Global Sales, LLC
 
744,080

 
$
4.50

 
12/31/17

 
1
 
Hazelton, PA
 
Amazon.com.dedc, LLC
 
615,600

 
$
5.02

 
07/31/18

 
1
 
Pittston / Wilkes-Barre, PA
 
Entemann's Sales Company, Inc.
 
144,000

 
$
5.68

 
07/31/17

 
1
 
Jessup / Scranton, PA
 
Haband Co., LLC
Cardinal LG Company
Two Chefs on a Roll, Inc.
 
140,800

 
$
5.53

 
10/12/17
10/01/19
08/31/23

 
135
 
Subtotal
 
 
 
32,361,795

 
 

 
 

 
Office Properties
 
 

 
 

 
 

 
1
 
Emmaus, PA
 
Sovereign Bank
 
4,800

 
$
33.52

 
02/28/19

 
1
 
Calabash, NC
 
PNC Bank, N.A.
 
2,048

 
$
36.62

 
12/31/18

 
1
 
St. Louis, MO
 
Bank of America, N.A.
NRT Missouri, LLC
John L. Corley, Inc.
 
25,061

 
$
11.22

 
12/31/17
12/31/19
03/31/22

 
1
 
Parsippany, NJ
 
CSC TKR, Inc. & Cablevision
Lightpath-NJ, Inc.
Solix, Inc
 
56,230

 
$
23.57

 

06/30/18
05/31/21

 
1
 
Westlake Village, CA
 
Bank of America, N.A.
 
253,720

 
$
12.73

 
12/31/20

 
1
 
Charlotte, NC
 
Time Warner Cable Southeast, LLC
 
113,600

 
$
10.81

 
06/30/26

 
1
 
Irving, TX
 
Nokia Solutions and Networks US LLC
 
293,890

 
$
17.50

 
05/31/19

 
1
 
Parsippany, NJ
 
Avis Budget Group, Inc.
 
212,535

 
$
16.22

 
03/31/23

 
2
 
Plantation, FL
 
Clearview Tower Company, LLC
Crawford & Company
 
239,616

 
$
16.83

 
7/26/2020

 
1
 
Commerce, CA
 
Unified Western Grocers, Inc.
 
108,000

 
$
21.03

 
12/31/19

 
1
 
Redondo Beach, CA
 
Northrop Grumman Systems Corporation
 
124,400

 
$
19.41

 
04/30/19

 
1
 
San Diego, CA
 
REMEC, Inc. and REMEC Microwave, Inc.
REMEC, Inc. and REMEC Microwave, Inc.
REMEC, Inc. and REMEC Microwave, Inc.
REMEC, Inc. and REMEC Microwave, Inc.
 
132,685

 
$
20.70

 
04/30/17
04/30/17
04/30/17
04/30/17

 
1
 
Dallas, TX
 
InterCall, Inc.
Encompass Staffing, Inc.
Fairfax (US) Inc.
NewFields Environmental & Engineering, LLC
Teachers Insurance and Annuity Association
of America
 
98,750

 
$
16.82

 
02/29/16
04/30/16
11/30/18
04/30/20

10/31/23

 
1
 
Houston, TX
 
SBM Atlantia, Inc.
 
171,091

 
$
19.25

 
06/30/22

 
1
 
Chantilly, VA
 
Lockheed Martin Corporation
 
71,507

 
$
25.63

 
09/30/16

 
1
 
Chantilly, VA
 
General Services Administration
 
71,504

 
34.35

 
01/31/17

 
3
 
Oakland, CA
 
Comcast of California/Colorado/
Washington I, Inc.
 
219,631

 
$
23.70

 
12/31/23

 
1
 
Hopkins, MN
 
Syngenta Seeds, Inc.
 
116,338

 
23.45

 
06/30/19

 
1
 
East Bay, CA
 
Carl Zeiss Meditec, Inc.
 
201,620

 
$
18.70

 
09/30/19

 
1
 
San Diego, CA
 
Time Warner Cable Inc.
 
134,000

 
$
21.00

 
02/28/18

 
1
 
Boston, MA
 
Nuance Communications, Inc.
 
200,605

 
$
30.39

 
03/31/30

 
1
 
Northern, NJ
 
Eisai, Inc.
 
208,911

 
$
24.84

 
12/31/21

 
1
 
Deerfield, IL
 
Markel Midwest, Inc.
 
99,566

 
$
21.40

 
01/31/20

 
4
 
Sterling, VA
 
Raytheon Company
Raytheon Company
Raytheon Company
Raytheon Company
 
634,549

 
$
14.87

 
02/28/26
02/28/26
02/28/26
02/28/26

 

38



Number of Properties
 
Location
 
Tenant(s)
 
Leased
Square
Feet
 
Contractual Base Rent Per Square Foot(1)
 
Term
Expiry(2)
1
 
Northern, NJ
 
Deloitte LLP
 
175,000

 
$
27.09

 
07/31/20

 
1
 
Jersey City, NJ
 
Long Island Holding A LLC
 
409,272

 
$
32.07

 
01/31/2016

 
1
 
Jersey City, NJ
 
New York SMSA Limited Partnership
New Cingular Wireless PCS, LLC
Tobmar International, Inc.
Lord Abbett & Co. LLC
Charles Komar & Sons, Inc.
 
431,458

 
$
24.37

 
02/11/17
03/31/17
11/30/20
12/31/24
12/31/31

 
1
 
Phoenix, AZ
 
JPMorgan Chase Bank, National Association
 
396,180

 
$
15.68

 
08/31/27

 
1
 
Philadelphia, PA
 
Endo Pharmaceuticals Inc.
 
299,809

 
$
19.50

 
12/31/24

 
1
 
Tampa, FL
 
Ford Motor Credit Company, LLC
 
120,500

 
$
15.00

 
03/31/21

 
2
 
Princeton, NJ
 
FMC Corporation
 
110,765

 
$
17.00

 
07/31/30

 
1
 
Raleigh, NC
 
PPD Development, LLC
 
44,916

 
$
11.59

 
11/30/23

 
1
 
Raleigh, NC
 
PPD Development LP
 
100,987

 
$
21.64

 
11/30/23

 
1
 
Raleigh, NC
 
LSSI Corp
PPD Development LP
 
115,748

 
$
21.09

 
10/31/16
11/30/23

 
1
 
Coppell, TX
 
American Home Mortgage Servicing, Inc.
 
182,700

 
$
14.85

 
12/06/16

 
1
 
Houston, TX
 
Det Norske Veritas (U.S.A.), Inc.
 
137,000

 
$
17.68

 
06/30/25

 
1
 
Columbus, OH
 
Nationwide Mutual Insurance Company
Nationwide Mutual Insurance Company
 
315,102

 
$
12.33

 
05/31/18
05/31/19

 
1
 
Columbus, OH
 
Lane Bryant, Inc.
 
135,485

 
$
12.98

 
01/31/19

 
1
 
Blue Ash, OH
 
Time Warner Entertainment Co., L.P.
Citicorp North America, Inc.
 
175,695

 
$
14.65

 
09/04/16
01/31/22

 
1
 
Blue Ash, OH
 
TW Telecom of Ohio, LLC
Time Warner Entertainment Co., L.P.
Woolpert, Inc.
The Lincoln National Life Insurance Company
FSN, Inc.
Oracle America, Inc.
Aerpio Therapeutics, Inc.
Omya, Inc.
Desalvo & Company, Inc.
HDR Engineering, Inc.
Lee Hecht Harrison, LLC
Wilmington College
Konica Minolta Business Solutions USA, Inc.
J.T. Clark and Associates, Inc.
Medical Solutions LLC
AdvancePierre Foods, Inc.
 
164,937

 
$
12.77

 
03/31/16
07/31/16
11/30/17
01/10/18
04/30/18
04/30/18
06/30/18
08/31/18
05/31/19
11/30/19
11/30/19
01/31/20
06/30/20
02/28/21
02/28/21
03/31/25

 
1
 
Blue Ash, OH
 
Federal Express Corporation
Time Warner Entertainment Co., L.P.
Time Warner Entertainment Co., L.P.
International Business Machines Corporation
Catholic Health Partners
Mercy Health Partners of Southwest Ohio
 
177,879

 
$
13.95

 
02/29/16
07/14/16
07/31/16
12/31/17
08/31/23
08/31/23

 
1
 
Miramar, FL
 
DeVry Inc.
 
94,060

 
$
21.65

 
06/30/21

 
1
 
Miramar, FL
 
Royal Caribbean Cruises Ltd
 
128,540

 
$
21.50

 
11/30/28

 
1
 
Lake Mary, FL
 
Florida Power Corporation
 
108,499

 
$
15.78

 
10/31/21

 
1
 
Celebration, FL
 
Disney Vacation Development, Inc.
 
100,924

 
$
25.85

 
06/15/21

 
1
 
Bloomington, MN
 
Rowland Shady Oak Properties, LLC
NCS Pearson, Inc.
Enventis Telecom Inc.
Federal Express Corporation
John Bergstrom
 
198,113

 
$
19.11

 
03/31/16
05/31/17
07/23/18
MTM
MTM

 
1
 
Bloomington, MN
 
Duke Realty Limited Partnership
General Services Administration
Hartford Fire Insurance Company
A & J Management Services, LLC
GSA - Customs and Border Patrol
Federal Express Corporation
Hiway Federal Credit Union
United Parcel Service, Inc.
 
293,892

 
$
22.41

 
05/24/16
05/24/16
11/30/18
10/31/20
10/31/29
MTM
MTM
MTM

 
1
 
Dallas, TX
 
Corphealth, Inc.
 
226,822

 
$
16.70

 
06/30/23

 
1
 
Phoenix, AZ
 
Bank of America, N.A.
 
63,489

 
$
8.87

 
06/30/23

 

39



Number of Properties
 
Location
 
Tenant(s)
 
Leased
Square
Feet
 
Contractual Base Rent Per Square Foot(1)
 
Term
Expiry(2)
1
 
Phoenix, AZ
 
Bank of America, N.A.
Bank of America, N.A.
 
196,911

 
$
8.87

 
06/30/23
06/30/23

 
1
 
Phoenix, AZ
 
Cingular Wireless
Sprint Spectrum, L.P.
Bank of America, N.A.
 
63,622

 
$
9.37

 
05/31/16
06/13/16
06/30/23

 
1
 
Phoenix, AZ
 
Bank of America, N.A.
 
63,592

 
$
8.87

 
06/30/23

 
1
 
Mesa, AZ
 
Bank of America, N.A.
 
20,960

 
$
8.87

 
06/30/23

 
1
 
Phoenix, AZ
 
Bank of America, N.A.
 
152,235

 
$
10.73

 
06/30/23

 
1
 
Long Beach, CA
 
Bank of America, N.A.
 
11,722

 
$
8.87

 
06/30/23

 
1
 
Bakersfield, CA
 
Bank of America, N.A.
 
13,465

 
$
8.87

 
06/30/23

 
1
 
Compton, CA
 
Bank of America, N.A.
 
10,294

 
$
8.87

 
06/30/23

 
1
 
El Segundo, CA
 
Bank of America, N.A.
 
12,141

 
$
8.87

 
06/30/23

 
1
 
Escondido, CA
 
Bank of America, N.A.
 
20,913

 
$
8.87

 
06/30/23

 
1
 
Fresno, CA
 
Bank of America, N.A.
 
20,125

 
$
8.87

 
06/30/23

 
1
 
Gardena, CA
 
Bank of America, N.A.
 
24,687

 
$
7.63

 
06/30/23

 
1
 
Glendale, CA
 
Bank of America, N.A.
Federal Express Corporation
 
38,085

 
$
8.88

 
06/30/23
MTM

 
1
 
Ontario, CA
 
Bank of America, N.A.
 
47,702

 
$
6.83

 
06/30/23

 
1
 
Newport Beach, CA
 
Bank of America, N.A.
 
21,509

 
$
8.87

 
06/30/23

 
1
 
Los Angeles, CA
 
Trilogy Eye Medical Group,Inc
Bank of America, N.A.
Bank of America, N.A.
 
14,868

 
$
10.81

 
01/31/18
06/30/23
06/30/23

 
1
 
Lynwood, CA
 
Bank of America, N.A.
Federal Express Corporation
 
11,096

 
$
8.87

 
06/30/23
MTM

 
1
 
North Hollywood, CA
 
Bank of America, N.A.
Bank of America, N.A.
Verdugo Management & Inv, Inc.
 
23,162

 
$
8.77

 
06/30/23
06/30/23
MTM

 
1
 
Sacramento, CA
 
Real Life Church
Bank of America, N.A.
Bank of America, N.A.
 
15,827

 
$
9.05

 
02/28/19
06/30/23
06/30/23

 
1
 
Sacramento, CA
 
Bank of America, N.A.
 
9,900

 
$
8.87

 
06/30/23

 
1
 
Los Angeles, CA
 
Bank of America, N.A.