Retail REIT Launches With $547M Portfolio Acquisition
February 14, 2022 | Dees Stribling | Bisnow National
A portfolio acquisition of more than a half-billion dollars has a newly renamed retail REIT off to a fast start under its new moniker.
American Finance Trust has completed the acquisition of 44 open-air U.S. shopping centers for a total of $547M.
The deal is the first part of an acquisition agreement inked previously, under which the company bought a total of 79 assets from CIM Real Estate Finance Trust for $1.3B. The acquisition of the remaining properties is expected to close by the end of March.
The company also announced on Monday that it is changing its name to The Necessity Retail REIT, with a new stock ticker, RTL, under which it will be trading on the Nasdaq Global Select Market beginning on Tuesday, according to a filing with the Securities and Exchange Commission.
The acquisition and name change are part of a pivot by the REIT to more recession- and pandemic-resistant property types, especially grocery store-anchored properties. To help fund the retail asset acquisition from CIM last year, American Finance Trust sold a New Jersey office complex leased to international life sciences giant Sanofi for $261M.
“Together with the previously announced disposition of three office buildings leased to Sanofi, which we sold in January at a 6.38% cash capitalization rate, we are well on our way to being the leading REIT that is focused on assets leased to necessity-retail tenants,” RTL CEO Michael Weil said in a statement.
Demand for grocery-anchored assets is at its highest level since roughly the turn of the 21st century, JLL Senior Managing Director Jim Hamilton told Chain Store Age in December. Retail real estate giants have been consolidating busily as well lately, including Kimco Realty Corp. and Weingarten Realty Investors’ merger in April 2021 and Kite Realty Group and Retail Properties of America’s merger in July.
With the latest acquisition, the newly named RTL now owns 1,048 properties totaling 28.8M SF. Its larger tenants are Truist, the bank holding company formed by the merger of BB&T and SunTrust Banks; Fresenius Medical Care; and Mountain Express Oil Co., which operates convenience stores.
Other major tenants include Home Depot, PetSmart, Stop & Shop, Dick’s Sporting Goods, Bob Evans and Best Buy. RTL’s portfolio is 92.3% occupied, with an average remaining lease term of 7.5 years, according to the company.
