NEW YORK CITY-The creation of a $21-billion net lease REIT came a step closer to reality Thursday after shareholders in American Realty Capital Properties Inc. and Cole Real Estate Investments Inc. approved the merger of the two companies. Following the voting, which closed at 5 p.m. Wednesday New York time, ARCP and Cole expect to close the merger promptly, subject to customary closing conditions.
Nicholas Schorsch, chairman and CEO of ARCP, says the impending merger will create the world’s largest net lease REIT, “benefitting from a best-in-class property portfolio, an experienced management team and a strong, flexible balance sheet.” Thanks to the two companies’ “disciplined” investment philosophy, he adds, “we are positioned to provide durable income to our stockholders through growth in property rents and asset appreciation. We are also excited to welcome the Cole management team and their employees to the ARCP family.”
Marc Nemer, Schorsch’s counterpart at Cole, says the transaction provides “the size, scale and operating efficiencies that will create superior growth opportunities and higher returns for our stockholders.” The Cole merger with ARCP follows the latter’s acquisitions of CapLease Inc. and American Realty Capital Trust IV, both of which closed in the fourth quarter of 2013.
As a result of the merger, ARCP will boast a pro forma combined company portfolio of nearly 3,700 properties leased to over 1,100 tenants across more than 100 million square feet in 49 states, the District of Columbia and Puerto Rico. ARCP’s portfolio will be 99% occupied with an average remaining lease term of 10.5 years. The $21.5-billion enterprise value will be 61% greater than its next largest competitor.