The board of Cole Office & Industrial REIT Inc. (CCIT II), a publicly registered non-traded real estate investment trust, has authorized a $1.03 per share special cash distribution to shareholders of the company’s Class A and Class T common stock.
The special distribution stems from the April 2019 sale of 18 industrial properties to publicly traded REIT, Industrial Logistics Properties Trust (NASDAQ: ILPT), for $624.7 million. The transaction included $567.7 million in cash and the assumption of a $57 million loan by the buyer.
The special distribution will be paid on January 15, 2020 to all stockholders of record as of the close of business on December 30, 2019. While the distribution will be paid in 2020, it will be reported as taxable income on shareholders’ 2019 income tax reporting statement.
Cole Office & Industrial REIT currently has an $11.03 net asset value per share, which will be reduced by $1.03 per share, resulting in a new NAV per share of $10.00, effective December 30, 2019. Shares were originally sold for $10.00 each.
Due to the special distribution, effective December 30, 2019, all shares issued and redeemed through the REIT’s distribution reinvestment program and share redemption program will use the updated NAV per share of $10.00.
In addition to the special distribution, the REIT plans to use a portion of the sale proceeds to repay debt, purchase net-lease properties with long-term leases, and for other general corporate purposes. From April 2019 through December 23, 2019, the REIT purchased six office buildings for approximately $273 million.
Cole Office and Industrial REIT commenced operations in September 2013 and invests primarily in single-tenant necessity office and industrial properties that are leased to creditworthy tenants under long-term, net leases. The company closed its primary offering in September 2016 after raising $672 million in investor equity. Cole Office and Industrial REIT is operated by CCO Group LLC, a subsidiary of CIM Group, a real estate and infrastructure owner, operator and lender.