NRDC blank cheque company seeks immortality

The special purpose acquisition vehicle set up by NRDC in 2007 is urging stockholders to allow it to continue operations as a REIT after failing to find a target business. The SPAC, which raised $414m in its 2007 IPO, will legally have to liquidate in October if shareholders say no.

NRDC Equity Partners is asking shareholders of its $414 million SPAC to allow the blank cheque company to regroup as a REIT – and avoid having to liquidate as required under Delaware corporation law.

The retail-focused private equity real estate firm floated the special purpose acquisition vehicle, NRDC Acquisition Corp., in 2007 with the intention of targeting US real estate and retail businesses.

However, since closing the offering on 23 October 2007, the retail sector has taken a hammering with NRDC’s own portfolio companies also feeling the pain. In February, the US jewellery and home furnishing retailer, Fortunoff, filed for Chapter 22 bankruptcy protection less than one year after being brought out of bankruptcy by the firm.

Today, NRDC – founded by AREA Property Partners’ Bill Mack and Lee Niebart, together with developers Robert and Richard Baker – said it would ask shareholders of the SPAC to amend NRDC Acquisition’s certificate of incorporation to allow for its “perpetual existence”.

NRDC plans to convert the SPAC into a real estate investment trust, targeting necessity-based retail on the East and West coasts of the US. Stuart Tanz, formerly with Pan Pacific Retail Properties will be the new chief executive officer of the company, which will rebrand as Retail Opportunity Investments Corporation if shareholders approve the changes.

Tanz said in a statement in August “necessity-based retail properties will fare better than other types of retail real estate as consumers continue to spend on necessity items while cutting back on luxury and other non-essential purchases.”

The shareholders meeting will take place on 16 October in New York, according to a statement today.