Cole Office & Industrial REIT (CCIT II) to Sell 18 Industrial Properties

February 21, 2019

Cole Office & Industrial REIT (CCIT II) to Sell 18 Industrial Properties

February 18, 2019 | James Sprow | Blue Vault

On February 14, 2019, Cole Office & Industrial REIT (CCIT II), Inc. (the “Seller”) entered into a Purchase and Sale Agreement with Industrial Logistics Properties Trust (the “Purchaser”), an unaffiliated Maryland real estate investment trust, to sell to the Purchaser 18 industrial properties, for which the Seller will receive, in the aggregate, $625.3 million in total consideration at closing, including $568.3 million in cash and the assumption by the Purchaser of a loan on a property in Ruskin, Florida. The Company’s board of directors has unanimously approved the Seller entering into the Purchase and Sale Agreement.

The Company anticipates paying a disposition fee based on the contract sales price of the properties to the Company’s affiliated advisor, Cole Corporate Income Management II, LLC (the “Advisor”) pursuant to the Company’s Advisory Agreement with the Advisor. The Company anticipates closing this sale during the first quarter of 2019; however, the Company can give no assurance that the closing will occur within this timeframe, or at all.

Related: Recent Changes to Nontraded REIT Estimated NAVs per Share

Following the final close of the transaction, the Company’s portfolio is expected to consist of 17 office properties and one industrial property encompassing approximately 2.8 million gross rentable square feet of commercial space across nine states. Those assets are 100.0% leased with a weighted average lease term of 9.0 years and represent 17 tenant concepts and 11 industry sectors. Major tenants for the remaining portfolio include Keurig Green Mountain, Dow Chemical, Freeport-McMoRan and Traveler’s Insurance.

The Company anticipates using the net sale proceeds for the repayment of debt, the acquisition of long-dated net lease properties in furtherance of the Company’s investment objectives, and for other general corporate purposes. Management believes that the Company is well-positioned to meet its investment objectives based on the portfolio’s diversification, overall credit quality and tenant roster.

Cole Office & Industrial REIT (CCIT II), Inc. is a nontraded REIT that raised approximately $678 million (including DRIP proceeds) in its public offering that closed September 17, 2016. As of March 28, 2018, the REIT had an estimated net asset value per share for both Class A and Class T common shares of $10.58.  Based upon the original offering price of $10.00 per share, the REIT had distribution yields of 6.30% for Class A shares and 4.93% for Class T shares after fees.  All distributions paid in 2018 were funded by cash flows from operations. 

Industrial Logistics Properties Trust (ILPT) is a real estate investment trust (REIT) formed to own and lease industrial and logistics properties throughout the United States.

As of September 30, 2018, ILPT owned 269 industrial and logistics properties with 29.2 million rentable square feet which are approximately 99.3% leased to 245 different tenants with a weighted average remaining lease term of approximately 10.9 years. ILPT became a publicly traded REIT in January 2018.

Sources:  SEC, Blue Vault, Industrial Logistics Properties Trust


Learn more about CIM Group on the Blue Vault Investment Manager page

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