CIM REIT Urges Shareholders to Reject Comrit’s Unsolicited Tender Offer
The board of CIM Real Estate Finance Trust, a publicly registered non-listed real estate investment trust formerly known as Cole Credit Property Trust IV, is recommending that shareholders reject an unsolicited tender offer launched by Comrit Investments last month, according to a letter to shareholders.
The board of CIM Real Estate Finance Trust, a publicly registered non-listed real estate investment trust formerly known as Cole Credit Property Trust IV, is recommending that shareholders reject an unsolicited tender offer launched by Comrit Investments last month, according to a letter to shareholders.
Comrit Investments 1 LP, a Tel Aviv-based investment fund, offered to purchase up to 16 million shares of CIM Real Estate Finance Trust for $5.27 per share in its offer that expires on April 30, 2020.
The REIT has a net asset value per share of $8.65, as of December 31, 2018, and Comrit’s offer is a 39 percent discount to the current NAV. Shares originally sold for $10.00.
“[CIM Real Estate Finance Trust] has paid 95 consecutive monthly distributions to its shareholders, with a current annualized distribution rate of $0.625 per share, which equates to an annualized yield of 7.23 percent per share based on the most recent estimated per share NAV,” the letter stated. “While there are no guarantees of future distributions or liquidity events, if you sell, you will no longer receive monthly distributions or otherwise have any rights with respect to the shares that you sell, including any appreciation in the value of the common stock.”
Comrit and its affiliates currently own approximately 241,600 shares of the REIT’s common stock, or less than 0.1 percent of the shares.
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 listed mortgage REITs.
In December 2019, CIM Real Estate Finance Trust sold 411 single-tenant properties for nearly $1.04 billion to Realty Income Corporation (NYSE: O), 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 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.
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