CIM Real Estate Finance Trust Inc. (CMFT), a publicly registered non-listed real estate investment trust formerly known as Cole Credit Property Trust IV, has sold 411 single-tenant properties for nearly $1.04 billion, representing the first tranche of the transaction with Realty Income Corporation (NYSE: O). The sale of the remaining properties is expected to close in late 2019 to early 2020.
The total transaction with Realty Income, which was announced in September 2019, is valued at approximately $1.25 billion and includes the assumption by Realty Income of existing mortgage debt totaling approximately $131 million.
The REIT noted that the net proceeds from the transaction will help pursue a more diversified investment strategy across the capital structure, ultimately transitioning to a mortgage REIT.
The company intends to balance its existing core of commercial real estate assets with a portfolio of commercial mortgage loans and other credit investments.
“We believe that the transition to a credit-focused strategy will maximize shareholder value,” said Richard Ressler, chairman of the board, chief executive officer and president of CMFT, and co-founder and principal of CIM Group. “Once we reposition our portfolio over the next 12-24 months, we may pursue a listing of the company’s common stock on a national securities exchange, providing liquidity for our shareholders.”
This transaction is the latest in a series of actions that have been taken by the REIT to further its objective of transitioning to a mortgage REIT, including amending the 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 listed 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. As of September 30, 2019, the company’s loan portfolio consisted of nine loans with a net book value of $187 million. The REIT launched its offering in January 2012 and raised more than $3 billion prior to closing in April 2014.