Boston, MA 05/16/2014 (wallstreetpr) – The board of directors of real estate investment trust Winthrop Realty Trust (NYSE:FUR) has approved a liquidation plan. As such, the company intends to sell all its assets over the next two years. The move to liquidate the company comes at a time when real estate companies are enjoying favorable business condition.
The demand for apartments, office and retail spaces has gone up as companies expand operations and new jobs put pressure on housing. Many REITs reported positive results in the first quarter while some saw their losses reducing in the quarter. However, Winthrop Realty Trust (NYSE:FUR) had little to celebrate in the quarter was the company saw its net income plunging compared with a year earlier quarter.
With challenges threatening its future, liquidation seems to be the best option on the table for Winthrop. The company plans to sell its $869 million portfolio that include 6, 2014 apartment units, 5.3 million square-feet of rentable space, assets worth $58 million and cash and cash equivalent valued at $103 million.
The board, in deciding in favor of liquidation, believes that the move will unlock value for the shareholders.
Shareholder vote
Following the board approval of the liquidation plan, Winthrop Realty Trust (NYSE:FUR) intends to take the matter to its shareholders for a vote. If the matter sails through the voting successfully, the company will liquidate the portfolio within two years.
Though the planned liquidation is linked to unfavorable conditions that the company faces, it hopes that it will realize big gain from the liquidation because of the strong demand of real estate properties in the recovering economy.
Loss-making business
Winthrop Realty Trust (NYSE:FUR) reported a net loss of $2.2 million or 6 cents per share. That was a drop from a net income of $11 million or 33 cents per share in the same quarter a year earlier. The company blamed the loss to $9.2 million impairment charge it suffered in the quarter. Although net income plunged in 1Q, revenue rose 62 percent to $19.51 million on a year-over-year basis.
