CIM Real Estate Finance Trust Lowers Net Asset Value Per Share

The board of CIM Real Estate Finance Trust, a publicly registered non-traded real estate investment trust formerly known as Cole Credit Property Trust IV, has declared a net asset value per share for the company's common stock as of December 31, 2019.

The board of CIM Real Estate Finance Trust, a publicly registered non-traded real estate investment trust formerly known as Cole Credit Property Trust IV, has declared a $7.77 net asset value per share for the company’s common stock as of December 31, 2019.

The REIT’s previous NAV per share was $8.65 as of December 31, 2018, and shares originally sold for $10.00 each.

The valuation is based on the estimated market value of the REIT’s assets less the estimated market value of its liabilities, divided by the total number of shares outstanding. Duff & Phelps LLC, a third-party valuation firm, assisted with the process and estimated a $7.49 to $8.05 per share valuation range with a midpoint of $7.77 per share.

As of December 31, 2019, the company had total assets of approximately $4.1 billion, total liabilities of nearly $1.7 billion, and 311.2 million shares outstanding. For comparison, as of December 31, 2018, the company had $5.2 billion in total assets, $2.5 billion in total liabilities, and 311.4 million shares outstanding.

During 2019, CIM Real Estate Finance Trust sold 497 properties, consisting of 482 retail properties, one industrial property and 14 shopping centers, for nearly $1.7 billion, excluding closing costs and disposition fees, for a gain of $180.7 million.

The REIT sold 411 single-tenant properties for roughly $1.04 billion to Realty Income Corporation (NYSE: O) in early December 2019, representing the first tranche of a 452-property sale to the public REIT. The total transaction is valued at approximately $1.25 billion and includes the assumption by Realty Income of existing mortgage debt totaling approximately $131 million.

CIM Real Estate Finance Trust said that although it intends to publish an updated estimated per share NAV on an annual basis, it may be required to reevaluate the estimated NAV per share sooner if the COVID-19 outbreak has a material adverse impact on the company, its tenants or its assets.

“The impact of the COVID-19 outbreak on the value of the company’s assets may be significant and will largely depend on future developments, which are highly uncertain and cannot be predicted,” the REIT stated in a filing with the Securities and Exchange Commission.

Adding, “The company will not be able to quantify any such impacts and their effect on the NAV until the company has greater visibility into the impact that the COVID-19 outbreak will have on the company’s tenants’ ability to continue to pay rent…, the degree to which federal, state or local governmental authorities grant rent relief…to the company’s tenants, the company’s ability to access the capital markets, and on the United States and worldwide financial markets and economy.”

Last year, CIM Real Estate Finance Trust announced plans to transition to a mortgage REIT, including amending its charter to help position it for a potential listing on a national securities exchange, re-naming the company, and amending its management agreement to better align with other publicly traded mortgage REITs.

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.

As of December 31, 2019, the REIT’s loan portfolio consisted of 12 loans with a net book value of $301.6 million, as well as a property portfolio of 334 retail properties, 59 anchored shopping centers and three industrial properties.

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