UPDATE: 8/2/13, 3:45 p.m. EDT. Additional information on Reed Smith's role advising W.P. Carey and CPA 16 has been added to the fifth paragraph of this story.

Clifford Chance, DLA Piper, Pepper Hamilton, and Reed Smith are advising on a $4 billion all-stock merger between W.P. Carey & Co. and Corporate Property Associates 16–Global Inc., the latest big deal featuring a real estate investment trust.

The transaction, announced last week and expected to close during the first quarter of 2014, will see New York–based W.P. Carey combine with CPA 16, its publicly held, nontraded REIT affiliate. Valued at roughly $2.4 billion, the deal also calls for W.P. Carey to assume $1.7 billion in debt from New York–based CPA 16, which was formed in 2003 and invests in real estate properties.
Christopher Giordano, an M&A partner at DLA who joined the firm’s New York office in 2007, is advising W.P. Carey on the transaction. Giordano did not immediately return a request for comment on the deal, which saw DLA national REIT tax practice cochair Robert LeDuc, corporate of counsel Sanjay Shirodkar, and associate Jon Venick also work on the matter.
DLA advised W.P. Carey last year on its merger with another of its 18 nontraded REIT affiliates, CPA 15, a move that enabled W.P. Carey to convert itself into a publicly traded REIT on the New York Stock Exchange. (REITs are required to share 90 percent of their profits with investors in order to protect their tax-exempt status.)
Paul Marcotrigiano serves as executive director and chief legal officer for W.P. Carey, whose chairman of the board of directors, Francis Carey, is a former senior partner at Reed Smith, having once headed the firm’s real estate practice. Reed Smith is acting as general real estate counsel to W.P. Carey and CPA 16 on the current deal, having previously performed a similar role on CPA 15's merger with W.P. Carey in 2012.
The merger between W.P. Carey and CPA 16 will create a combined entity with a portfolio of more than 730 properties worldwide leasing space to more than 230 companies, making it the second-largest publicly traded REIT in the net lease space behind Escondido, California–based Realty Income Corp., according to The Deal.
W.P. Carey specializes in sale-leaseback financing, a process of buying properties from companies who continue to occupy the same space as tenants, thereby freeing them up to use proceeds from the sale of those real estate assets for other business purposes.
Clifford Chance, which counseled CPA 15 on its merger with W.P. Carey last year, is now advising CPA 16 on its tie-up with the real estate investor. Capital markets partner Kathleen Werner and tax partner Richard Catalano are leading a team from the Magic Circle firm representing CPA 16 on the deal, while Pepper Hamilton chairman emeritus Barry Abelson is counseling a special committee of CPA 16’s board, according to an SEC filing.
Shareholders of W.P. Carey and CPA 16 must approve the merger for it to move forward.
REIT M&A has mostly remained slow this year, with some analysts citing a lack of sellers, although a handful of billion-dollar deals have been announced so far this year.
The Am Law Daily reported earlier this month on a trio of Am Law 100 firms advising on the $3.1 billion cash-and-stock sale of American Realty Capital Trust IV to American Realty Capital Partners.