CIM Real Estate Finance Trust Inc., a publicly registered non-traded real estate investment trust, has sold 44 open-air shopping centers to The Necessity Retail REIT Inc. (Nasdaq: RTL), a publicly traded REIT managed by AR Global and formerly known as American Finance Trust (Nasdaq: AFIN).
CIM received total consideration of $557 million for the 44 properties, which consists of $530.3 million in cash (including $9.6 million in earnout proceeds) and $26.7 million of Necessity Retail REIT common stock.
The sale represents the first tranche of a series of transactions that will result in CIM Real Estate Finance Trust selling all of its shopping centers to The Necessity Retail REIT for $1.32 billion.
The portfolio includes 79 power, anchored, and grocery centers and two single-tenant properties, comprised of approximately 9.5 million rentable square feet of commercial space across 27 states. The remaining 37 properties are expected to close in phases during the first and early second quarter of 2022.
The total portfolio sale price will include up to $1.27 billion in cash, $53.4 million in Necessity Retail REIT common stock, and additional consideration based on certain performance measures of the sites during a 180-day period post-closing.
After the repayment of approximately $348.2 million of debt and $6.7 million of certain transaction costs, CIM Real Estate Finance Trust plans to redeploy the net sale proceeds into investments in senior secured loans and credit leases, consistent with its business strategy as a credit-focused REIT.
Following the final close, CIM Real Estate Finance Trust’s portfolio is expected to total 13.2 million rentable square feet of commercial space across 45 states. Additionally, the REIT’s senior secured loan portfolio totaled $1.6 billion as of September 30, 2021.
CIM Real Estate Finance Trust recently completed its merger with affiliated non-traded REIT, CIM Income NAV Inc., in a stock-for-stock merger transaction, marking another step in its business plan execution and anticipated public listing in 2022.
CIM Real Estate Finance Trust primarily owns and operates a portfolio of core commercial real estate assets consisting of net leased properties and a portfolio of commercial mortgage loans. The REIT launched its offering in January 2012 and raised more than $3 billion prior to closing in April 2014.