CIM Real Estate Finance Trust Recommends Shareholders Reject Unsolicited Tender Offer

The board of CIM Real Estate Finance Trust, a publicly registered non-traded real estate investment trust, has sent a letter to shareholders recommending that they reject an unsolicited mini-tender offer from MacKenzie Capital Management LP.

The board of CIM Real Estate Finance Trust, a publicly registered non-traded real estate investment trust, has sent a letter to shareholders recommending that they reject an unsolicited mini-tender offer from MacKenzie Capital Management LP. The tender offer expires on March 7th.

MacKenzie is offering to purchase up to 1.25 million shares of CIM Real Estate Finance Trust common stock for $3.15 per share. The offer price is 56.3 percent less than the REIT’s most recent net asset value per share of $7.20, as of March 31, 2021. MacKenzie and its affiliates currently own 11,118 shares.

“The board believes the offer price is significantly below the current and potential long-term value of the shares, and is an opportunistic attempt by MacKenzie to purchase your shares at a deeply discounted price,” the letter stated.

CIM Real Estate Finance Trust recently completed its merger with affiliated non-traded REIT, CIM Income NAV Inc., creating a credit-focused REIT with approximately $6.1 billion in enterprise value and more than $3.1 billion in equity value. The REIT anticipates a public listing in 2022.

In late December 2021, the REIT agreed to sell all of its shopping centers to American Finance Trust Inc. (Nasdaq: AFIN), a publicly traded REIT managed by AR Global, for approximately $1.32 billion. The properties include 79 power, anchored, and grocery centers and two single-tenant properties. The transaction is expected to close during the first quarter of 2022.

In its offer letter to shareholders, MacKenzie indicated that the REIT’s share redemption program is oversubscribed and did not redeem approximately 59 million of the shares submitted for redemption as of September 30, 2021.

Subsequent to September 30, 2021, the REIT redeemed roughly 1.3 million shares at $7.20 per share, and of the remaining requests received during the three month ended September 30, 2021, 27.7 million shares went unfulfilled, MacKenzie said.

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.

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