Through its operating partnership, American Finance Trust Inc. has completed the initial acquisition of 44 open-air shopping centers for a total of $547 million, excluding closing costs. The closing is the first tranche of acquisitions from a previously announced definitive agreement to acquire a portfolio of 79 power, anchored and grocery Centers and two single tenant properties from certain subsidiaries of CIM Real Estate Finance Trust Inc. for $1.3 billion. The company expects to acquire the remaining properties in the transaction by the end of the first quarter 2022. At that point, the company’s portfolio will comprise over 1,000 properties, 29 million square feet and $382 million in pro-forma annualized straight-line rent.
As of February 10, 2022 the company’s name changed to The Necessity Retail REIT Inc. “Where America Shops”. On February 15, 2022, the company began trading under the new ticker “RTL”.
“Today’s acquisition of 44 open-air shopping centers featuring necessity-retail tenants makes this the ideal time to complete our rebranding to The Necessity Retail REIT,” said Michael Weil, CEO of RTL. “Together with the previously announced disposition of three office buildings leased to Sanofi, which we sold in January at a 6.38% cash capitalization rate, we are well on our way to being the leading REIT that is focused on assets leased to necessity-retail tenants. Upon completing the Transaction, approximately 43% of our pro forma SLR [statutory liquidity ratio] will come from high-growth markets, primarily in the Sun Belt, and our portfolio will be increasingly representative of where America shops every day, including a significant concentration on desirable grocery-anchored shopping centers. We look forward to acquiring the remaining properties in the transaction later this quarter.”
The 10 largest tenants are expected to be Truist (4% of annualized straight-line rent), Fresenius (3.9%), Mountain Express Oil Co. (3.5%), AmeriCold (3.4%), Home Depot (3.3%), PetSmart (2.6%), Stop & Shop (2.5%), Dick’s Sporting Goods (2.3%), Bob Evans (2.2%) and Best Buy (2.2%). The 10 largest industries are expected to be discount retail (8% of annualized straight-line rent), gas/convenience (7%), specialty retail (7%), healthcare (6%), grocery (5%), quick service restaurant (5%), home improvement (5%), retail banking (5%), apparel retail (5%) and full-service restaurant (4%).
The move also reduces company’s pro forma SLR derived from office assets to 1% from 7%.
