Cole Office & Industrial REIT (CCIT II) Inc., a publicly registered non-traded real estate investment trust, has agreed to sell 18 industrial properties to publicly traded REIT, Industrial Logistics Properties Trust (NASDAQ: ILPT), for $568.3 million in cash and the assumption of a $57 million loan by the buyer. The $625.3 million transaction is expected to close within 60 days.
“The market is exhibiting strong demand for industrial assets, which presented an opportunity for CCIT II to leverage the value of these properties,” said Mark Selman, managing director for portfolio oversight at CIM Group.
The 18 industrial properties are 100 percent leased and total approximately 8.7 million rentable square feet across 12 states. Tenants include UPS, Procter & Gamble, and Subaru. CCIT II anticipates using the net sale proceeds for debt repayment, property acquisition, and other general corporate purposes.
Selman added, “We believe the REIT is well-positioned to meet its investment objectives based on the portfolio’s diversification, overall credit quality and tenant roster.”
Following the close of the transaction, the REIT’s portfolio will likely consist of 17 office properties and one industrial property totaling approximately 2.8 million rentable square feet. The properties are 100 percent leased with a weighted average lease term of nine years. Major tenants include Keurig Green Mountain, Dow Chemical, Freeport-McMoRan and Traveler’s Insurance.
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, according to Summit Investment Research. 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.