Cole Cos. Refuels Till With $135M Facility

Dan Weber, executive vice president and chief investment officer for the Phoenix-based company, says the facility was structured because of Cole's growth and the current credit markets. "One of the biggest changes we've had to make in our business model is to close all cash versus a permanent loan," Weber explains to GlobeSt.com. "Because we're taking down more assets in all cash, we need the flexibility of a credit facility."

Weber stresses the company's acquisition goals remain the same as do the types of assets targeted for acquisition. Cole's preferred properties are single and multi-tenant retail assets, with long-term leases in place.

"Just securing the financing is different," Weber says. "This was a natural progression for a company like ours that's becoming a significant player in the real estate community."

Weber says the assets now in the collateral pool could change, based on their worth. "This isn't meant to be a static pool," he explains. The revolving credit facility has a floating rate of 180 to 210 basis points above Libor.

To date, Cole Cos. has spent about $400 million of the $1.8 billion that it plans to spend this year. In May, Cole acquired 127,185 sf of single-tenant assets for $33.9 million. The retail properties are situated in Arizona, Maryland, Minnesota, New York, Ohio and Vermont.

Weber acknowledges that, while the first half of the year has been slow, the second half should pick up. "We've been cautious and disciplined with our buys, like we usually are," he says. "But we expect to see more product come onto the market in the next several months." Having the credit facility, he continues, will provide the company with more flexibility to buy.

New York City-based Bank of America Securities LLC was the sole lead arranger on the transaction while JP Morgan Chase Bank, also headquartered in New York City, served as syndication agent. Charlotte, NC-based Bank of America Corp is the administrative agent for the facility. US Bank of Cincinnati, RBS Citizens of Providence, RI and Comerica Inc. of Dallas are also participating in the revolving credit facility.