American Finance Trust (AFIN) announces $1.3 billion portfolio acquisition.
American Finance Trust, Inc. (AFIN) announced today that it has entered into a purchase agreement to acquire 81 retail assets from CIM Real Estate Finance Trust for $1.3 billion. The portfolio is said to include multi-tenant power centers and grocery-anchored centers, and is being purchased at a 7.2% cash cap rate. AFIN also announced that it is under agreement to sell three non-core office properties for $261 million. Upon closing of both transactions in 1Q'22, the combined portfolio will increase to approximately $5 billion with annualized rental revenues of $382 million.
The CIM acquisition is expected to be financed with assumed property-level debt, borrowings under the company's credit facility, office disposition proceeds, and approximately $53 million of equity issued to the sellers. In connection with the transaction, the company will be rebranded as "The Necessity Retail REIT" and trade under the ticker symbol RTL.
“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,” said Michael Weil, CEO of AFIN. “On a pro forma basis, our portfolio will comprise approximately $5 billion in real estate investments at cost, increase multi-tenant occupancy to 91%, reduce our top 10 tenant concentration from 39% to 30% of SLR and reduce our office exposure to just 1% from 7%. The Company’s unique and complementary necessity-based asset mix of long-term single tenant net leases and necessity-based multi-tenant portfolio with significant leasing upside that positions us for sustained growth, supported by a dedicated asset management and leasing platform with decades of experience. Our best-in-class portfolio that will be rebranded as the preeminent Necessity-Based retail REIT, will focus on tenants and locations where America shops and partner with leading brands such as Wal-Mart and Publix.”
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The CIM acquisition is expected to be financed with assumed property-level debt, borrowings under the company's credit facility, office disposition proceeds, and approximately $53 million of equity issued to the sellers. In connection with the transaction, the company will be rebranded as "The Necessity Retail REIT" and trade under the ticker symbol RTL.
“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,” said Michael Weil, CEO of AFIN. “On a pro forma basis, our portfolio will comprise approximately $5 billion in real estate investments at cost, increase multi-tenant occupancy to 91%, reduce our top 10 tenant concentration from 39% to 30% of SLR and reduce our office exposure to just 1% from 7%. The Company’s unique and complementary necessity-based asset mix of long-term single tenant net leases and necessity-based multi-tenant portfolio with significant leasing upside that positions us for sustained growth, supported by a dedicated asset management and leasing platform with decades of experience. Our best-in-class portfolio that will be rebranded as the preeminent Necessity-Based retail REIT, will focus on tenants and locations where America shops and partner with leading brands such as Wal-Mart and Publix.”
12/20/2021