NEW YORK CITY-AR Capital LLC, the sponsor of several net lease REITs, and Inland American Real Estate Trust have entered a purchase and sale agreement worth approximately $2.3 billion and involving 294 retail, office and industrial assets. It includes the assumption of about $795.3 million in debt and Inland’s repayment of $360.9 million in debt. The largest piece of the deal is a 247-asset, 10-million square foot portfolio that’s being acquired by American Realty Capital Trust V for $1.448 billion, including the assumption of $488 million of debt.
In an SEC filing, ARCT V says the portfolio is 100% leased to nine tenants, with the leases having a weighted average remaining lease term of 11.7 years. Largest of the tenants by number of locations is Suntrust Bank, with 215 branches, while the largest by square footage is Americold with approximately 1.9 million square feet of cold storage warehouse space across 11 locations. Other major tenants in the portfolio being acquired by ARCT V include Sanofi SA, C&S Wholesale Grocers, Ahold, American Express Travel and Home Depot.
“This purchase will enable us to substantially complete our acquisition stage,” says Nicholas Schorsch, chairman and CEO of ARCT V. “At the same time, we will surpass our stated goal of constructing a portfolio of properties that is at least 50% investment grade, leased on a long-term basis and well-diversified by industry, geography and tenancy.”
Another portfolio covered by the Inland/ARC agreement will trade to American Realty Capital Properties. The $416.5-million portfolio consists of 40 properties which are net leased to 26 tenants, diversified across 21 industries and 20 states.
A third transaction includes four office properties net leased to UnitedHealthcare Services, located in Cypress, CA; Indianapolis; and Onalaska and Wauwatosa, WI. It’s trading to American Realty Healthcare Trust for $123 million.
For Oak Brook, IL-based Inland American, the sale of its core net lease portfolio represents “a major step in executing our long-term strategy of focusing our energies and investment capital in the multi-tenant retail, lodging and student housing asset classes,” says Thomas McGuinness, president of the REIT. “We believe these asset classes will generate consistent cash flows, which will allow us to continue providing our stockholders with sustainable distributions while allowing us the opportunity to benefit from current real estate trends.”