NEW YORK CITY-American Realty Capital Properties and Cole Real Estate Investments Inc. have completed their merger, creating the largest publicly traded net lease REIT. First announced this past October and valued at $11.2 billion, the merger closed on Friday, one day after ARCP successfully completed a $2.55-billion unsecured note offering in three tranches.
“We were able to accelerate completion of this acquisition because both companies’ teams worked tirelessly and collaboratively to get this deal done,” says Nicholas Schorsch, chairman and CEO of ARCP. “The combined team that was so effective in bringing early closure to this transaction will now become a single, integrated team post-closing.”
Schorsch says the post-merger ARCP, which has an enterprise value of $21.5 billion, expects to have “a significant cost-of-capital advantage. We intend to use this low cost, readily available capital to build out our portfolio and to attract and retain exceptional professionals.”
Just 2% of Cole’s shares figured in a cash election by the company’s stockholders, resulting in a $147-million payout in lieu of ARCP common stock. Schorsch sees this 98% election to receive ARCP stock as “a vote of confidence from the Cole stockholders that ARCP can continue to grow its portfolio aggressively while building out its intellectual capital and further to this, its bench strength.”
As a result of the ARCP/Cole merger, which follows closings on mergers with CapLease Inc. and American Realty Capital Trust IV over the past few months, the REIT‘s portfolio now includes nearly 3,700 properties leased to over 1,100 tenants occupying over 100 million square feet in 49 states, the District of Columbia and Puerto Rico. More than 49% of annualized rents are now generated from investment grade tenants. ARCP’s portfolio is 99% occupied with an average remaining lease term of 10.5 years.