Cole Reports 70% Year-Over-Year Growth in NTR Equity Raise
Vereit (NYSE: VER), the publicly-traded real estate investment trust formerly known as American Realty Capital Properties Inc., released its earnings results for the third quarter of 2016. Cole Capital, the company’s non-traded REIT sponsor, successfully closed one offering, Cole Office & Industrial REIT II and launched Cole Office & Industrial REIT III.
On a conference call yesterday, Vereit CEO Glenn Rufrano discussed Cole’s new broker-dealer relationships and gave an update on the company’s progress in that area. During the third quarter, Cole secured eight selling agreements, and an additional four after the close of the quarter, bringing the total to 38 selling agreements. Rufrano indicated that the larger broker-dealers have not yet signed on.
Cole currently has three open non-traded real estate investment trusts, including Cole Credit Property Trust V, Cole Office & Industrial REIT III, and Cole Real Estate Income Strategy (Daily NAV).
During the quarter, Cole raised $172.6 million of capital on behalf of its non-traded REITs, including $36.2 million through distribution reinvestment plans, compared to $100.3 million, including $33.7 million of DRIP proceeds, in the third quarter of 2015. This represent a 72.1 percent increase year-over-year.
In October 2016, Cole Capital raised $35.4 million of capital on behalf of the Cole REITs, including $12.0 million through DRIP. The company noted that the lower capital raise reflects the close of CCIT II and the opening of CCIT III.
Cole’s market share during the quarter reached 13.7 percent, and a cumulative 12.1 percent for the first three quarters of 2016. Rufrano noted that its market share has been generally increasing over time, and in the fourth quarter of 2015, market share was just 5 percent. He said that these numbers may drop slightly next quarter as CCIT III ramps up its capital raising efforts.
Cole invested $173.9 million in 13 properties on behalf of the Cole REITs in the third quarter of 2016, compared to $315.3 million in 32 properties in the third quarter of 2015.
“Cole has come a long way, and we’re really happy and proud of the way they have reestablished their brand and market share,” said Rufrano on the call. “But as you know, it’s a bit of a shaky market and they have done a good job in a shaky market.”
He continued, “We expect the market and understanding of the DOL [fiduciary rule] process will shake out this year into next year. So, we’re going to continue to work with Cole to make sure it maximizes its value and watch the market at the same time.”
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