Griffin to Buy Remaining Properties in Global Income Trust Portfolio for $93.7 Million
Global Income Trust Inc., a publicly registered non-traded real estate investment trust sponsored by CNL Financial Group LLC, entered into an agreement to sell Griffin Capital Corporation Inc. the three remaining properties in their real estate portfolio for an aggregate sale price of approximately $93.7 million in cash, less the loans that encumber the properties and will be assumed by Griffin at closing. The net proceeds from the sale will be approximately $38.46 million based on July 31, 2015 loan balances.
The properties to be sold by Global Income Trust include Imeson Park, a 817,680-square-foot distribution facility located in Jacksonville, Florida that was originally purchased in October 2012 for $42.5 million; Heritage Commons III, a 119,001-square-foot Class A office building located in Fort Worth, Texas that was purchased in June 2011 for $18.8 million; and Heritage Commons IV, a 164,333-square-foot class-A office building located in Fort Worth, Texas that was purchased in October 2011 for $31 million.
The sale agreement contains termination rights for both parties, where the REIT has agreed to pay Griffin a termination fee of $3 million if the sale is terminated because a superior proposal is received and publicly announced before the date of the stockholder meeting; the REIT enters into a definitive agreement for, or completes the sale of, the properties within 12 months of the termination of the agreement; or the REIT’s board of directors fails to recommend the sale in the proxy statement to stockholders.
Following the closing of the sale and subject to the approval of Global Income Trust’s stockholders, the company would be liquidated and dissolved. Upon liquidation and dissolution, stockholders will receive an estimated $7.01 per share of outstanding common stock, which is less than the company’s most recently reported net asset valuation per share. The principal factors in the estimated distribution being less than NAV include asset-based adjustments resulting from the sale negotiations and due diligence process, such as declining tenant credit, closing and transaction costs, and changes in foreign currency related to the sale of the German properties in the portfolio, of which the company has sold 94.9 percent of its equity interests thus far. The board of directors approved a sale of the remaining 5.1 percent of the German properties interests to the company’s sponsor, or an affiliate of the sponsor, for an aggregate sale price of $500,000, which is subject to stockholders’ approval.
Additionally, in light of the pending sale and plan of liquidation and dissolution, the board of directors approved the suspension of cash distributions on their common stock effective August 4, 2015.
