CIM Group Acquires Cole Capital from VEREIT
February 2, 2018 | James Sprow | Blue Vault
VEREIT, Inc. (NYSE: VER) on February 1 announced that it closed the sale of Cole Capital (“Cole”) to an affiliate of CIM Group. VEREIT is a publicly-traded real estate investment trust formerly known as American Realty Capital Properties Inc. In connection with the acquisition, Cole Capital Corporation, Cole’s broker-dealer subsidiary, has been renamed CCO Capital LLC.
“Cole’s distribution team, including sales, national accounts, shareholder relations, compliance, and marketing, have joined CIM, and CIM’s entrepreneurial and collaborative culture will support the needs of our business,” said Bill Miller, president and CEO of CCO Capital LLC. “The structure and operations of the Cole REITs should continue without disruption.”
Currently, Cole operates five public non-listed real estate investment trusts, including Cole Credit Property Trust IV Inc., Cole Credit Property Trust V Inc., Cole Real Estate Income Strategy Inc., Cole Office & Industrial REIT (CCIT II) Inc., and Cole Office & Industrial REIT (CCIT III) Inc. The Cole REITs together have more than $7.6 billion in real estate assets.
Cole has seen three of their nontraded REIT programs complete full-cycle liquidity events, beginning with Cole Credit Property Trust III in June, 2013, which listed on the NYSE, followed by Cole Credit Property Trust II in July, 2013, and Cole Corporate Income Trust which merged with Select Income REIT in 2015.
“CIM is acquiring expertise and taking over operations for what we believe are best-in-class performing real estate funds in the net-lease sector,” said Richard Ressler, CIM co-founder and principal. “We believe that adding net-lease assets is complementary to CIM’s urban real asset platforms and will benefit all of our stakeholders.”
Glenn Rufrano voluntarily resigned as president and CEO of Cole Credit Property Trust V, Cole Real Estate Income Strategy, and both Cole Office & Industrial REITs, but will continue to serve on the board of each company.
In connection with the transaction, VEREIT may receive up to $200 million, comprised of approximately $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, among other things, requires VEREIT to provide operational real estate support to Cole for approximately one year.
Cole’s distribution team, including sales, national accounts, shareholder relations, compliance and marketing, have joined CIM with the closing.
CIM was established in 1994 and is a vertically-integrated owner and operator of $25.7 billion of real estate assets for its own account and on behalf of its partners and co-investors. CIM’s real assets include urban residential, commercial, retail, hospitality, debt and infrastructure investments as well as U.S.-based retail and industrial net-lease.
According to its press release, the strategic transaction enables VEREIT to simplify its business model and focus on its core real estate operating business.
Learn more about CCO Capital LLC (Cole Capital) on the Blue Vault Sponsor Focus page.
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