NEW YORK CITY-Having sought unsuccessfully to acquire Cole Credit Property Trust III this past spring, American Realty Capital Properties Inc. will be taking over Phoenix-based Cole Real Estate Investments Inc., the REIT formed from the subsequent merger of Cole Credit III and Cole Holdings. Valued at $11.2 billion, the merger announced Wednesday morning—along with the pending acquisitions of CapLease of American Capital Trust IV—will create a net lease REIT with an enterprise value of $21.5 billion, the largest such company in the space.
The merger has been approved by the boards of both companies and is expected to close in the first half of 2014. It will create a net lease portfolio of about 102 million square feet, with 3,732 properties leased to over 600 tenants across 49 states and Puerto Rico.
Cole currently owns 41 properties in Arizona and locally, seven of these are in Tucson and a total of 322,388 sq. ft. Tucson properties are as follows:
- Home Depot at 4302 N Oracle, Tucson purchased Oct. 2009 – 102,732 SF
- Albertson’s at 1350 N Silverbell, Tucson purchased Sept. 2009 – 60,315 SF
- Albertson’s at 6600 E Grant, Tucson purchased Oct. 2010 – 49,491 SF
- Walgreens at 5525 E River, Tucson purchased Nov. 2010 – 15,120 SF
- Walgreens at 1145 S Harrison, Tucson purchased Dec, 2010 – 14,490 SF
- PLS Check Cashier at 6470 S 12th Ave, Tucson purchased Aug, 2011 – 2,550 SF
- Silverado Plaza at 105 S Houghton, Tucson purchased Dec, 2011 – 77,690 SF
Commenting on the transaction, ARCP’s Chairman and Chief Executive Officer, Nicholas S. Schorsch said, “Today it is my great pleasure to announce the merger of two leading U.S. real estate companies, American Realty Capital Properties and Cole Real Estate Investments. As a result, ARCP will become the largest net lease REIT and the new industry leader. We benefit by uniting not only two exceptional real estate portfolios, but also by joining forces with Cole’s world-class management team. Going forward, we will benefit greatly from the executive leadership currently at Cole Real Estate Investments.”
Christopher H. Cole, founder and Executive Chairman of Cole Real Estate Investments, stated, “We are pleased to have reached this agreement with ARCP, which we believe provides compelling value and significant equity upside potential for Cole stockholders at a time when we believe the industry is consolidating. My decision and the decision of our board to merge the companies under Nick’s leadership is entirely forward-thinking, namely, our two companies are far better and more powerful together than apart; our union provides immediate and obvious benefits of size, scale and diversification. This transaction represents a major step in achieving our goal of creating the premier real estate company that delivers best-in-class long-term results to our clients. Nick and his team have demonstrated the ability to grow their net lease business rapidly, yet deliberately, realizing value for their stockholders with every carefully mapped step. Our collective portfolio of properties and combined human capital will position the company for outsized growth moving ahead. As I step away from the company which I built and bears my name, I am very proud of and will miss the outstanding people who have helped me construct our world-class enterprise. I am very proud of our exceptional team and am confident that they will become an integral part of the ARCP family.”
For complete investor announcement from Cole see here:
https://www.colereit.com/press/arcp-and-cole-merge-to-create-largest-net-lease-reit.aspx