Realty Income to buy 454 single-tenant retail properties from CMFT for $1.25B
Realty Income announced that it has signed a definitive agreement to acquire 454 single-tenant retail properties from CIM Real Estate Finance Trust, or CMFT, a non-listed REIT which is sponsored by an affiliate of CIM Group, for approximately $1.25B in cash. The transaction is expected to close in various tranches with the acquisition of most of the properties in the portfolio expected to close in 2019, subject to customary closing conditions. The transaction is expected to be executed at an approximate 7% cash cap rate, resulting in an investment spread relative to its first-year weighted average cost of capital well above the company's historical average. The portfolio carries a weighted average remaining lease term of 9.7 years and generates 58% of total rental revenue from investment-grade rated companies or their subsidiaries. The portfolio being acquired from CMFT consists of 454 properties with approximately 5.1M leasable square feet. The properties in the portfolio are currently leased to 59 different tenants across 20 industries, with Texas and California. Based on the tenant and industry concentrations for this portfolio, Realty Income does not expect the acquisition, once completed, to have a meaningful impact on its existing tenant and industry concentrations.