I have been following the saga of Chambers Street Group (NYSE:CSG) since the company listed shares on the NYSE in May 2013. You may recall that CSG opened up the liquidity spigot on the worst day possible – May 21, 2013, just a day before Ben Bernanke announced the pullback in Fed funds, better known as “taper tantrum.”
While CSG was new to the public markets, the company previously existed as a non-traded REIT that raised equity through a selling arm of CNL in Orlando. Over the course of CSG’s public REIT existence the shares have underperformed – investors who purchased shares on the first day of trading have seen a price reduction of around 27%.
Obviously, the primary reason that I hit the eject button was because of share price underperformance, here’s what I said in a recent article:
Nothing has really changed with Chambers Street since I purchased shares and (as far as my investment is concerned) I’m doing a tad better than even money. Even though there’s no permanent CEO (today), my biggest fear is the multi-tenant office exposure and shorter duration leases.
I added,
With the recent departure of Jack Cuneo (former CEO) I’m not feeling the attraction.
As far as I was concerned, CSG was running out of options. Something was broken and with no experienced leadership I was compelled to suggest that the best alternative for Chambers Street was a sell. Here’s what I wrote in April:
…maybe there’s an M&A deal with Chambers Street? Remember, a large percentage of the Chambers Street’s properties were acquired during the Great Recession (at attractive prices) and with no CEO in place, there could be an interesting opportunity for W.P. Carey (NYSE:WPC). Remember that Carey has a European platform in place already. Another long-shot is Gramercy Property Trust (NYSE:GPT). Dugan (CEO Of GPT) could craft a reverse-merger and add significant scale to Gramercy’s platform (further integrating management).
