Gramercy Capital Corp said it plans to remain independent and expects to raise additional capital in the future, sending its shares down more than 11 percent.
Gramercy, which invests in commercial real estate finance and property, also appointed Gordon DuGan as its chief executive, replacing Roger Cozzi.
DuGan was previously CEO of WP Carey & Co and will buy 1 million Gramercy shares from the company for $2.52 per share.
The company, which said it discussed potential strategic deals with interested parties, will deploy capital into net leased real estate.
Gramercy had in June last year created a special committee to look at strategic alternatives available to the company.
It had reached a settlement with lenders including Goldman Sachs Mortgage Co and Citigroup North America regarding its $549.7 million mezzanine loans last September.
Shares of Gramercy were trading at $2.40 in morning trade on the New York Stock Exchange. They touched a low of $2.22 earlier in the session.