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Cole Preps $3.5 Billion Office & Industrial REIT

An S-11 for Cole Office & Industrial REIT III has been registered with the Securities & Exchange Commission. The company, which intends to invest primarily in single-tenant, income-producing, necessity office and industrial properties, is seeking to raise up to $3.5 billion from the sale of its Class A and Class T shares of common stock and distribution reinvestment plan shares.

Up to $2.5 billion in shares will be sold in the company’s primary offering and up to $1 billion in shares will be sold as DRIP shares.

The Class A shares will be offered to the public for $10.00 per share, with a 7 percent selling commission ($0.70) and a 2 percent dealer manager fee ($0.20).

The Class T shares will be offered at $9.57 each, with a 3 percent selling commission ($0.29) and a 2 percent dealer manager fee ($0.19).

For the trail commission, the company will pay 0.8 percent per year until a maximum of 7 percent in selling commissions and fees is reached, or until the total underwriting compensation from all sources equals 10 percent of the gross proceeds from the sale of Class T shares in the primary offering.

The Class A and Class T DRIP shares are both priced at $9.09 each.

According to the company, VEREIT Inc. (NYSE: VER), Cole’s parent company, said that it or one of its affiliates intends to purchase at least $2.5 million in Class A shares of common stock in this offering, but no binding agreement currently exists.

The previous Cole Office & Industrial REIT II was declared effective in September 2013 and has raised $403 million since inception. The REIT owns 30 properties located in 17 states that were purchased for $887.9 million. As of December 31, 2015, these properties were 100 percent leased.

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