Realty Income to Acquire Properties from CIM Real Estate Finance Trust, Inc. for $894 Million, 7.1% Cash Cap Rate
Realty Income Corporation (NYSE: O) announced on December 30, 2022, a definitive agreement to acquire up to 185 retail and industrial properties from CIM Real Estate Finance Trust, Inc. for approximately $894 million. This acquisition is projected to offer a 7.1% cash cap rate with a weighted average remaining lease term of 9.2 years. Approximately 48% of the contractual rent is from investment-grade clients. The deal is expected to close in Q1 2023, subject to standard conditions. This transaction aims to enhance Realty Income's portfolio and is anticipated to be accretive to earnings.
- Acquisition of 185 properties for approximately $894 million is expected to enhance portfolio quality.
- Projected 7.1% cash cap rate indicates attractive risk-adjusted returns.
- 48% of annualized rent from investment-grade clients boosts financial security.
- Transaction expected to be immediately accretive to earnings on a leverage-neutral basis.
- None.
SAN DIEGO, Dec. 30, 2022 /PRNewswire/ -- Realty Income Corporation (Realty Income, NYSE: O), The Monthly Dividend Company®, today announced that it has signed a definitive agreement to acquire up to 185 single-tenant retail and industrial properties from subsidiaries of CIM Real Estate Finance Trust, Inc. (CMFT), a non-listed REIT which is sponsored by an affiliate of CIM Group, for approximately
Inclusive of all 185 properties, the transaction is expected to be executed at an approximate
"We are pleased to execute our fourth portfolio transaction with CIM since 2019, demonstrating our continued access to high-quality portfolio opportunities at attractive risk-adjusted returns and our sustained momentum on both the forward equity and acquisition fronts. Upon closing, this transaction will be immediately accretive to earnings on a leverage-neutral basis and is highly complementary to our existing portfolio," said Sumit Roy, Realty Income's President & Chief Executive Officer.
The aggregate 185 property portfolio is anticipated to consist of up to 4.6 million square feet, leased to 55 retail clients who in the aggregate represent
Number of Properties | % of Total Portfolio Annualized | |||
Lowe's | 8 | 11.9 % | ||
Walgreens | 14 | 7.6 % | ||
United Oil (Apro) | 15 | 6.6 % | ||
Bob Evans | 20 | 5.6 % | ||
Kroger | 5 | 5.5 % | ||
CVS | 10 | 4.6 % | ||
Hobby Lobby | 5 | 4.0 % | ||
Kohl's | 3 | 3.5 % | ||
CarMax | 1 | 3.0 % | ||
National Tire & Battery | 8 | 3.0 % | ||
Top 10 Client Total | 89 | 55.3 % | ||
(1) Based on the aggregate 185 property portfolio and the projected total portfolio annualized contractual rent. | ||||
Amounts and percentages used in this press release are subject to change based on the final composition of the portfolio at closing.
Realty Income does not expect the acquisition, once completed, to have a meaningful impact on its existing client and industry concentrations.
Realty Income, The Monthly Dividend Company®, is an S&P 500 company and member of the S&P 500 Dividend Aristocrats® index. We invest in people and places to deliver dependable monthly dividends that increase over time. The company is structured as a REIT, and its monthly dividends are supported by the cash flow from over 11,700 real estate properties owned under long-term net lease agreements with commercial clients. To date, the company has declared 630 consecutive common stock monthly dividends throughout its 53-year operating history and increased the dividend 118 times since Realty Income's public listing in 1994 (NYSE: O). Additional information about the company can be obtained from the corporate website at www.realtyincome.com.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended. When used in this press release, the words "estimated," "anticipated," "expect," "believe," "intend," and similar expressions are intended to identify forward-looking statements. Forward-looking statements also include discussions of our business and portfolio including portfolio acquisitions and the related properties timing, concentrations, rent, properties, clients, and impact to the current portfolio, future operations and results, the announcement of operating results, strategy, plans, and the intentions of management. Forward-looking statements are subject to risks, uncertainties, and assumptions about us, which may cause our actual future results to differ materially from expected results. Some of the factors that could cause actual results to differ materially are, among others, our continued qualification as a real estate investment trust; general domestic and foreign business and economic conditions; competition; fluctuating interest and currency rates; access to debt and equity capital markets; continued volatility and uncertainty in the credit markets and broader financial markets; other risks inherent in the real estate business including our clients' defaults under leases, potential liability relating to environmental matters, illiquidity of real estate investments, and potential damages from natural disasters; impairments in the value of our real estate assets; changes in income tax laws and rates; the continued evolution of the COVID-19 pandemic and the measures taken to limit its spread, and its impacts on us, our business, our clients (including those in the theater industry), or the economy generally; the timing and pace of reopening efforts at the local, state and national level in response to the COVID-19 pandemic and developments, such as the unexpected surges in COVID-19 cases, that cause a delay in or postponement of reopenings; the outcome of any legal proceedings to which we are a party or which may occur in the future; acts of terrorism and war; any effects of uncertainties regarding whether the anticipated benefits or results of our merger with VEREIT, Inc. will be achieved; and those additional risks and factors discussed in our reports filed with the U.S. Securities and Exchange Commission. Readers are cautioned not to place undue reliance on forward-looking statements. Those forward-looking statements are not guarantees of future plans and performance and speak only as of the date of this press release. Actual plans and operating results may differ materially from what is expressed or forecasted in this press release. We do not undertake any obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date these statements were made.
View original content to download multimedia:https://www.prnewswire.com/news-releases/realty-income-to-acquire-properties-from-cim-real-estate-finance-trust-inc-for-894-million-7-1-cash-cap-rate-301711551.html
SOURCE Realty Income Corporation
FAQ
What is Realty Income's recent acquisition about?
What is the cash cap rate for Realty Income's new property acquisition?
When is the closing date for Realty Income's property acquisition?
How much rental income will be derived from investment-grade clients?
What is the expected impact of the acquisition on Realty Income's earnings?
