CIM Real Estate Finance Trust, Inc. Closes First Tranche of $1.25 Billion Transaction of Single-Tenant Properties with Realty Income

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Tucson, Arizona – Certain subsidiaries of CIM Real Estate Finance Trust, Inc. (“CMFT”), a publicly registered non-listed real estate investment trust (“REIT”), completed the sale of 411 single-tenant properties for $1.035 billion, representing the first tranche of the transaction with Realty Income Corporation (“Realty Income,” NYSE: O) that was previously announced in September. The sale of the remaining properties is expected to close in late 2019 and/or early 2020, subject to customary closing conditions. The total transaction with Realty Income is valued at approximately $1.25 billion and includes the assumption by Realty Income of existing mortgage debt totaling approximately $131 million.

Tucson properties included as part of the $1.25 billion portfolio were ten properties of the 411 single tenant investment properties that sold before year end. The Tucson properties were valued at approximately $18.77 million and included:

  1. PetSmart at 7727 E Broadway Blvd, Tucson for $1,822,504(RED COMP #7363)
  2.  Family Dollar at 9776 South Nogales Hwy, Tucson for $1,804,596 (RED COMP #7362)
  3. Giant Gas Station at 6225 W Ajo Hwy, Tucson for $843,656 (RED COMP #7358)
  4. Giant Gas Station at 3902 E Speedway Bvd, Tucson for $1,261,187 (RED COMP #7359)
  5. Giant Gas Station at 15841 El Tiro Road, Marana for $3,144,894 (RED COMP #7360)
  6. Giant Gas Station at 6890 N Sandario Road, Tucson for $1,052,871 (RED COMP #7361)
  7. Giant Gas Station at 6280 East Broadway Blvd, Tucson for $1,309,733 (RED COMP #7426)
  8. Giant Gas Station at 4301 East Broadway Blvd., Tucson for $836,787 (RED COMP #7435)
  9. Giant Gas Station at 6777 N Sandario Road in Tucson for $5,358,211 (RED COMP #7434)
  10. Giant Gas Station at 1200 South Sierrita Mountain Road in Tucson for $1,339,195 (RED COMP #7427)

Eastdil Secured represented CMFT in the transaction.

CMFT reported in a written statement that net proceeds from the transaction would assist CMFT in the process of pursuing a more diversified investment strategy across the capital structure, ultimately transitioning to a mortgage REIT. The Company intends to balance its existing core of necessity commercial real estate assets leased to creditworthy tenants under long-term net leases with a portfolio of commercial mortgage loans and other credit investments.

“We believe that the transition to a credit-focused strategy will maximize shareholder value,” said Richard Ressler, Chairman of the Board of Directors, Chief Executive Officer and President of CMFT, and Co-Founder and Principal of CIM Group.  “Once we reposition our portfolio over the next 12-24 months, we may pursue a listing of the Company’s common stock on a national securities exchange, providing liquidity for our shareholders.”

This transaction is the latest in a series of actions that have been taken by the Company to further its objective of transitioning to a mortgage REIT, including amending the Company’s charter to help position the Company for a potential listing on a national securities exchange, re-naming the Company, and amending the Company’s management agreement with its external manager to better align the terms of the agreement to those of other publicly listed mortgage REITs.

“We are pleased with our progress diversifying our investments and the steps taken to help achieve our long-term objectives,” Ressler added.

CMFT is a public, non-listed REIT formed in 2012 that primarily owns and operates a diversified portfolio of core commercial real estate assets consisting of net leased properties and a portfolio of commercial mortgage loans. As of September 30, 2019, the Company’s loan portfolio consisted of nine loans with a net book value of $187.0 million. CIM Real Estate Finance Trust, Inc. was previously known as Cole Credit Property Trust IV, Inc. and changed its name on August 14, 2019. CMFT, which is sponsored by an affiliate of CIM, intends to pursue a more diversified investment strategy, ultimately transitioning to a mortgage REIT.

 

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