VEREIT To Sell Cole Capital to an Affiliate of CIM Group
November 13, 2017 | Vereit, Inc.
VEREIT, Inc. (NYSE: VER) ("VEREIT") , a full-service real estate operating company, and CIM Group, an integrated, full-service real assets investment manager, today announced the signing of a purchase agreement for the sale of Cole Capital ("Cole"), VEREIT's investment management business, to an affiliate of CIM Group (together with CIM Group, "CIM"). Currently, Cole has more than $7.6 billion in assets under management and manages five public non-listed real estate investment trusts: Cole Credit Property Trust IV, Inc., Cole Credit Property Trust V, Inc., Cole Real Estate Income Strategy (Daily NAV), Inc., Cole Office & Industrial REIT (CCIT II), Inc., and Cole Office & Industrial REIT (CCIT III), Inc.
In connection with the transaction, VEREIT may receive up to $200 million, comprised of $120 million cash paid at closing under the purchase agreement and up to $80 million in fees to be paid under a six-year services agreement based on Cole's future revenues. The services agreement will, among other things, require VEREIT to provide operational real estate support to Cole for approximately one year. Subject to regulatory approvals and customary closing conditions, the transaction is expected to close at the end of the fourth quarter of 2017 or during the first quarter of 2018.
The strategic transaction enables VEREIT to simplify its business model and focus on its real estate operating business. It also enables CIM to acquire one of the market-leading retail distribution organizations serving Independent Broker-Dealers and Registered Investment Advisors, which will complement CIM's existing relationships with institutional investors and wirehouse distribution channels.
"CIM is acquiring expertise and what we believe are best-in-class performing funds in the net/finance lease sector," said Richard Ressler, CIM Co-Founder and Principal. "We believe that adding net/finance lease offerings to CIM's product capabilities is complementary to CIM's Real Asset platforms and will benefit all of our stakeholders."
"The transaction allows us to simplify our core business model and focus on our large, diversified single-tenant real estate portfolio," said Glenn Rufrano, Chief Executive Officer of VEREIT. "Cole Capital will have a sponsor in CIM with an institutional foundation and established distribution relationships with wirehouses."
Citigroup Global Markets Inc. acted as the exclusive financial advisor to VEREIT.
Audio Webcast Details
VEREIT will host a live audio webcast beginning at 5:00 p.m. ET today (Monday, November 13, 2017) to discuss the transaction. Access the audio webcast at http://ir.vereit.com/. Participants should log in 10-15 minutes early.
Information set forth herein (including information included or incorporated by reference herein) contains "forward-looking statements" (within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended), which reflect VEREIT's expectations regarding future events and VEREIT's future financial condition, results of operations and business including VEREIT's expectation that the transaction will close in the fourth quarter of 2017 or the first quarter of 2018, VEREIT's plan to simplify its core business model and the possibility that VEREIT could be paid up to an additional $80 million based on Cole's future revenues. The forward-looking statements involve a number of assumptions, risks, uncertainties and other factors that could cause actual results to differ materially from those contained in the forward-looking statements. Generally, the words "expects," "anticipates," "assumes," "targets," "goals," "projects," "intends," "plans," "believes," "seeks," "estimates," variations of such words and similar expressions identify forward-looking statements. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, most of which are difficult to predict and many of which are beyond VEREIT's control. If a change occurs, VEREIT's business, financial condition, liquidity and results of operations may vary materially from those expressed in the forward-looking statements.
The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: VEREIT's plans, market and other expectations, objectives, intentions and other statements that are not historical facts; the developments disclosed herein; VEREIT's ability to execute on and realize success from its business plan; VEREIT's ability to meet its 2017 guidance; the ability to obtain necessary regulatory approvals; the ability to close the transaction by the end of the first quarter of 2018; VEREIT's ability to provide the required services under the services contract; risks associated with pending government investigations and litigations related to VEREIT's previously disclosed audit committee investigation; the inability of Cole Capital to regain its prior level of capital raise; the ability to retain or hire key personnel; and continuation or deterioration of current market conditions. Additional factors that may affect future results are contained in VEREIT's filings with the U.S. Securities and Exchange Commission (the "SEC"), which are available at the SEC's website at www.sec.gov. VEREIT disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of changes in underlying assumptions or factors, new information, future events or otherwise, except as required by law.
VEREIT (NYSE: VER) is a leading, full-service real estate operating company with investment management capability. VEREIT owns and actively manages a diversified portfolio of retail, restaurant, office and industrial real estate assets with a total asset book value of $14.7 billion including approximately 4,100 properties and 92.2 million square feet, located in 49 states, as well as Puerto Rico and Canada. VEREIT is a publicly traded Maryland corporation listed on the New York Stock Exchange. Additional information about VEREIT can be found on its website at www.VEREIT.com and through social media platforms such as Twitter and LinkedIn.
Established in 1994, CIM is a leading partner for global investors seeking to invest in urban real assets and associated credit strategies with a principal focus on North America. CIM is a real asset manager of urban residential, commercial, retail, hospitality, debt, and infrastructure investments as well as U.S. based net/finance lease and other credit strategies. CIM's broad expertise includes in-house research, acquisition, investment, development, finance, leasing and property management capabilities. For more information, please visit www.cimgroup.com.
About Cole Capital®
Cole Capital is an industry leading non-listed REIT sponsor, offering innovative net lease real estate products that serve individual investors and financial professionals. Cole Capital's business model is built upon the simple objective of collecting rent from some of the biggest corporations in America and passing it on as a stream of distributions to investors. Additional information about Cole Capital and its products can be found on its website at www.colecapital.com.
Learn more about Cole Capital on the Blue Vault Sponsor Focus page.