Britt Snider, principal at the JBG Companies, shows off a model of a renovated L’Enfant Plaza. (Evy Mages/For The Washington Post)

Executives at the JBG Cos., owners of more Washington-area real estate than any other firm, have been looking for years to expand elsewhere in the country and thought they had their ticket to grow with a proposed $8.4 billion acquisition of New York REIT.

The deal would have given the Chevy Chase-based firm 3.3 million square feet of New York real estate, a chance to chart the company’s growth for the foreseeable future.

But it didn’t stick. On Tuesday morning — 69 days after announcing the deal — the two companies called it off, issuing a joint press release saying there was no way forward after sustained resistance from New York REIT shareholders who wanted to sell the company’s buildings for cash instead.

[The developer that made a fortune on U Street is trying the same thing in New York]

“After extensive discussions with our stockholders, the NYRT Board of Directors determined that it is in the best interests of the Company and its stockholders to terminate the combination agreement effective immediately,” Randolph C. Read, chairman of the New York REIT’s board, said in the release.

Now the two firms will head in different directions. Read said he plans to follow the urging of investors and begin selling his company’s buildings. JBG executives meanwhile will return to a Washington market that continues to struggle with a glut of empty office space.

Since its founding by three partners as a spinoff from a legal practice in 1960, JBG has grown into the largest developer in the Washington region, raising more than $3.6 billion for its real estate funds and amassing the rights to 44.6 million square feet of space.

In recent years, the company has been buying up large chunks of Metro-accessible neighborhoods, such as U Street, Potomac Yard in Alexandria and Twinbrook in Rockville, and pursuing broad overhauls that blend residential with retail and more.

Behind the scenes, Matt Kelly, JBG managing partner, has been moving the company toward two goals: finding a way to tap the stock markets and moving into other cities such as New York and possibly San Francisco and Boston. With the deal to takeover a publicly traded New York firm, he would have achieved both, and would have personally become the chief executive of a new firm, JBG Realty Trust.

[Washington developer bets $250 million that you’ll want to live and work in America’s empty office buildings]

Kelly said in an interview that he and the firm’s other principals spent six months from start to finish negotiating the New York deal and then trying to push it over the finish line.

But NYRT investors harbored doubts from the start. After the agreement was announced May 25, NYRT’s stock price dropped 8 percent to $9.08, the largest drop in two years, further hardening opposition. Following announcement of the deal’s demise Tuesday morning, the stock price rebounded to more than $10 after closing at $9.48 per share Monday.

Ultimately, efforts to find common ground fell short.

“We did do some things. They were prepared to do some things. The issue was that it didn’t go far enough,” he said.

Kelly said the firms parted amicably. Though NYRT is now preparing to sell off its properties, he said there were no discussions at the moment about acquiring them through a straightforward sale.

He said JBG would not pursue a public offering either.

“This was really appealing because it was a good portfolio and New York was at the top of the list for us…If we do go into another market it will be New York,” he said.

Part of the disappointment may stem from questions about the Washington market’s potential. Though the region is adding jobs, office vacancy remained at over 11 percent in the second quarter, according to Delta Associates, as government agencies and private employers continue to downsize into smaller spaces.

Follow Jonathan O’Connell on Twitter: @oconnellpostbiz