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CIM Real Estate Finance Trust selling retail portfolio for $1.3B - The Real Deal

CIM Real Estate Finance Trust selling retail portfolio for $1.3B

Michael Weil and Richard Ressler (AR-Global, CIM Group)

CIM Real Estate Finance Trust announced Monday it entered an agreement to sell all of its shopping centers to American Finance Trust Inc. for $1.3 billion.

The deal includes 81 properties, anchored with major retail tenants and grocery centers, according to a release. Upon closing, the New York-based real estate investment trust will have a portfolio that will comprise over 1,000 properties and 29 million square feet.

Upon closing, American Finance will rebrand itself as “The Necessity Retail REIT.” The name is an apparent nod to the company’s focus on “ necessity-based retail,” as described in a release on the deal.

The transaction is expected to close during the first quarter of 2022.

The deal “represents a key milestone as CMFT sharpens its focus on its core business as a credit REIT that invests principally in senior secured loans and credit leases,” Richard Ressler, CIM’s principal and co-founder, said in a statement.

The acquisition is expected to be funded through a combination of cash, including an anticipated $261 million of proceeds from the sale of American Finance Trust’s Sanofi office asset, borrowings under the company’s credit facility, property debts and $53 million of equity issuance to the sellers.

“This immediately accretive off-market transaction represents a unique value creation opportunity. We are adding significant scale while further enhancing our best-in-class portfolio with pandemic-tested assets on accretive terms,” Michael Weil, CEO of American Finance Trust, said in a statement.

Following the transaction’s closing, CIM’s credit lease portfolio is expected to consist of 114 tenant concepts encompassing approximately 13.2 million gross rentable square feet of commercial space across 45 states. Those assets are 98 percent leased. Additionally, the REIT’s senior secured loan portfolio totaled $1.6 billion as of September 30, 2021.