Old Dominion Real Estate Investment Trust has announced plans to acquire Realty Industries Inc., another Richmond company, for $60 million.
The new company, United Dominion Realty Trust Inc., which will be located in Old Dominion's present Richmond office, will operate as a real estate investment trust with about 15 employes. John P. McCann, president of Old Dominion, will become president of the new company. Sam Kornblau, president of Realty Industries, will become vice chairman of United.
"This acquisition results in a much larger real estate trust company with improved prospects for the future," McCann said in an interview last week. "Both companies have compatible portfolios with their properties predominantly located in Virginia and North Carolina."
The acquisition of Realty will increase Old Dominion's assets from $40 million to $100 million, McCann said.
"Realty Industries has some of the most attractive real estate in the capital area and also in eastern North Carolina," said a financial analyst from a Richmond firm.
Old Dominion will acquire Realty's 2,361 apartment units -- 555 in North Carolina and 1,806 in Richmond. In addition, Old Dominion has 1,382 apartments -- 499 in Charlotte, N.C., and 883 in Virginia -- and the company's commercial property. "The unwanted assets of Realty, the homebuilding and construction business, plus a couple of properties that we didn't find suitable, were sold" to Samco Development Corp., a new development and construction firm formed by Kornblau, McCann explained.
Old Dominion and Realty expect to hold stockholder meetings in mid-December, and if approved by shareholders, the merger will become effective on Dec. 31.