Comrit Investments 1 LP, a Tel Aviv-based investment fund, has launched an unsolicited tender offer to purchase up to 3.4 million shares of Class A and Class T common stock in Cole Office & Industrial REIT Inc. (CCIT II) for $8.52 each. The offer, which constitutes more than 5 percent of the outstanding shares, expires on June 26, 2018.
Cole Office & Industrial REIT recently declared a $10.58 per share net asset value for its Class A and Class T shares as of December 31, 2017, which is nearly 20 percent more than the Comrit offer price.
The REIT’s board recommends that shareholders reject the Comrit offer and not tender their shares. “We believe that the offer is an opportunistic attempt by Comrit to purchase shares at a discounted price substantially below the actual value of the shares,” the board said in a letter to REIT shareholders.
Comrit will pay nearly $29 million if all 3.4 million shares in the current offer are purchased. The company and its affiliates currently own approximately 610,500 shares of CCIT II Class A and Class T common stock, or approximately 0.9 percent of the total shares outstanding.
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. The company’s $1.2 billion portfolio is comprised of 36 properties totaling 11.4 million rentable square feet. Cole Office and Industrial REIT is operated by CCO Group LLC, a subsidiary of CIM Group.