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Vornado to merge with JBG, create JBG Smith Properties

The deal will cost $8.4 billion

On Monday, New York City-based developer Vornado Realty Trust announced that they plan to spin off and merge their D.C. area operations with Chevy Chase-based developer, The JBG Companies. This $8.4 billion deal will create the D.C. region's largest commercial real estate company, called JBG Smith Properties, according to Washington Business Journal.

The Wall Street Journal further reported that the deal is slated for completion by the second quarter of 2017 with 11.8 million square feet of office space and over 4,400 apartments. The Wall Street Journal further reported:

"The Vornado deal calls for JBG to contribute an array of office buildings and apartments in the region, which would give that company and its investors a 26 percent stake in the new entity. Numerous other properties owned by JBG and its partners—totaling about $3.3 billion worth of condos, office buildings, and other assets—are excluded from the deal."

Vornado shareholders are expected to own approximately 74 percent of the combined company, while JBG limited partners are expected to own approximately 20 percent, according to a press release.

Earlier this year, JBG attempted to merge with New York REIT, but the deal fell through. Washington Business Journal reported that this was due to shareholders who preferred a liquidation, asset sales, or other more immediate return on their investment.