{"id":1004197435,"date":"2017-11-15T05:25:28","date_gmt":"2017-11-15T13:25:28","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004197435"},"modified":"2022-12-08T18:56:08","modified_gmt":"2022-12-09T02:56:08","slug":"cim-group-to-expand-with-purchase-of-cole-capital","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/cim-group-to-expand-with-purchase-of-cole-capital\/","title":{"rendered":"CIM Group to Expand With Purchase of Cole Capital"},"content":{"rendered":"<p>By Gail Kalinoski<\/p>\n<div id=\"attachment_1004197437\" style=\"width: 310px\" class=\"wp-caption alignright\"><a href=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2017\/11\/GlennRufrano-HighRes-e1481055467232.jpg\" target=\"_blank\" rel=\"noopener noreferrer\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-1004197437\" data-attachment-id=\"1004197437\" data-permalink=\"https:\/\/www.commercialsearch.com\/news\/cim-group-to-expand-with-purchase-of-cole-capital\/glennrufrano-highres-e1481055467232\/\" data-orig-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2017\/11\/GlennRufrano-HighRes-e1510751673359.jpg\" data-orig-size=\"399,299\" data-comments-opened=\"0\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;,&quot;orientation&quot;:&quot;0&quot;}\" data-image-title=\"GlennRufrano-HighRes-e1481055467232\" data-image-description=\"\" data-image-caption=\"&lt;p&gt;Glenn Rufrano, CEO of VEREIT, Inc.&lt;\/p&gt;\n\" data-large-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2017\/11\/GlennRufrano-HighRes-e1510751673359.jpg?w=399\" class=\"wp-image-1004197437 size-medium\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2017\/11\/GlennRufrano-HighRes-e1510751673359.jpg\" alt=\"Glenn Rufrano, CEO of VEREIT, Inc.\" width=\"300\" height=\"225\" srcset=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2017\/11\/GlennRufrano-HighRes-e1510751673359.jpg 399w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2017\/11\/GlennRufrano-HighRes-e1510751673359.jpg?resize=300,225 300w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><p id=\"caption-attachment-1004197437\" class=\"wp-caption-text\">Glenn Rufrano, CEO of VEREIT Inc.<\/p><\/div>\n<p>When commercial real estate veteran Glenn Rufrano took over as CEO of American Realty Capital Properties Inc., now VEREIT Inc., in April 2015, one of his priorities in turning around the net-lease leader was restoring the brand value of its investment management arm, Cole Capital. The company had just been shaken by an accounting scandal.<\/p>\n<p>This week, VEREIT announced plans to sell Cole Capital, a non-listed REIT sponsor that has more than $7.6 billion in assets under management, to an affiliate of CIM Group, for up to $200 million. Based out of Phoenix along with VEREIT, Cole manages five public non-listed real estate investment trusts: Cole Credit Property Trust IV Inc., Cole Credit Property Trust V Inc., Cole Real Estate Income Strategy Inc., Cole Office &amp; Industrial REIT Inc., and Cole Office &amp; Industrial REIT Inc.<\/p>\n<p>VEREIT may receive up to $200 million, comprised of $120 million cash at closing and up to $80 million in fees to be paid under a six-year services agreement based on Cole\u2019s future revenues. One condition requires VEREIT to provide operational real estate support to Cole for a year. The transaction is expected to close later this year or during the first quarter of 2018.<\/p>\n<p><em>\u201cCole Capital will have a sponsor in CIM with an institutional foundation and established distribution relationships with wirehouses,\u201d<\/em> Rufrano said in a prepared statement, adding that the sale, <em>\u201callows us to simplify our core business model and focus on our large, diversified single-tenant real estate portfolio.\u201d<\/em><\/p>\n<p>CIM, a Los Angeles-based urban real estate and infrastructure fund manager with approximately $18.1 billion of assets under management, gets a market-leading retail distribution organization serving independent broker-dealers and registered investment advisors.<\/p>\n<p><em>\u201cCIM is acquiring expertise and what we believe are best-in-class performing funds in the net\/finance lease sector. We believe that adding net\/finance lease offerings to CIM\u2019s product capabilities is complementary to CIM\u2019s Real Asset platforms and will benefit all of our stakeholders,\u201d<\/em> Richard Ressler, CIM co-founder &amp; principal, said in a prepared statement.<\/p>\n<h2>Strong Quarter for Cole<\/h2>\n<p>Last week, when Rufrano was discussing VEREIT\u2019s third-quarter earnings with analysts, he noted Cole Capital raised $66.4 million of new equity during the quarter.<\/p>\n<p><em>\u201cWe continued to add selling agreements and advisers. And since the beginning of the year, Cole has been able to increase its market share of sales from 4.3 percent in Q1 to 8.3 percent in Q3. New equity for October was $24.2 million, an increase of 10 percent over the average monthly run rate last quarter,\u201d<\/em> Rufrano said during the earnings call according to a transcript provided by Seeking Alpha.<\/p>\n<p>While he didn\u2019t tip his hand about the sale that would be announced less than a week later, he said <em>\u201cas always for any asset in the portfolio, we maintain optionality.\u201d<\/em><\/p>\n<p>Cole Capital was acquired in February 2014 as part of the blockbuster $11.2 billion purchase of Cole Real Estate Investments Inc., by ARCP that created a $21.5 billion net lease REIT, the largest of its kind. It was the biggest of a series of fast-paced deals made by ARCP\u2019s chairman &amp; CEO Nicholas Schorsch. RCS Capital Corp., a broker-dealer holding company also controlled by Schorsch, was planning on buying Cole Capital for $400 million and $300 million assumption of debt in early 2015 but the deal fell apart after an accounting scandal at ARCP was revealed in the fall of 2014.<\/p>\n<p>Since Rufrano became CEO of the firm now known as VEREIT, he and his team have disposed of more than $2 billion in assets as they also focused on achieving investment-grade balance sheet metrics and restoring the Cole Capital brand. The portfolio has a portfolio of approximately 4,100 retail, restaurant, office and industrial assets and a total value of $14.7 billion. While the team has been selling properties, they have also acquired a total of $497 million in assets year to date.<\/p>\n<p>CIM Group has also been active this year, particularly in New York City where it agreed to buy 16 Court St., a <a href=\"https:\/\/www.commercialsearch.com\/news\/cim-buys-brooklyn-office-building-in-171m-deal\/\">Class A office building<\/a> in Brooklyn in August for $171 million. Earlier in the year, CIM acquired the Gilman Hall property, which includes the 146,000-square-foot Gilman Hall Tower and contiguous parcels in Manhattan for a reported $90 million. Other New York City investments include 11 Madison Ave., 432 Park Ave., 737 Park Ave. and 225 Fifth Ave.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>VEREIT may receive as much as $200 million, composed of $120 million in cash at closing and as much as $80 million in fees to be paid under a six-year service agreement based on Cole\u2019s future revenues.<\/p>\n","protected":false},"author":1068,"featured_media":1004507428,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21781,21743,21808,21783,23891,21742],"tags":[38340,33055,33150,32951],"class_list":["post-1004197435","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-corporate-real-estate","category-deals","category-featured","category-investment","category-national","category-latest","tag-american-realty-capital-properties","tag-cole-capital","tag-glenn-rufrano","tag-vereit"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.0 (Yoast SEO v28.0) - 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