Select Income REIT (SIR) is to acquire all of the outstanding common stock of Cole Corporate Income Trust (CCIT) for approximately USD3.0 billion.
The purchase price will be payable in a combination of cash and SIR common shares plus the assumption of certain mortgage debt.
The transaction is subject to approval by SIR and CCIT shareholders and other customary conditions, and it is expected to close during the first quarter of 2015.
David Blackman, president and chief operating officer of SIR, says: “The combination of Select Income REIT and Cole Corporate Income Trust will create the premiere single tenant net lease office and industrial REIT with more than 43 million square feet of real estate in 35 states that are 98 per cent occupied. The combined portfolio of properties will have an 11.1 year weighted average remaining lease term, an average property age of 10.7 years and investment grade rated tenants paying 37 per cent of annual rents. The scale, diversification and improved portfolio metrics are expected to lower SIR’s cost of capital and enhance shareholder value.”
SIR believes CCIT has the highest quality single tenant net lease office and industrial portfolio among all publicly owned REITs. CCIT is a non-traded net lease REIT that will provide SIR with 64 office and industrial properties with approximately 16.1 million rentable square feet (excluding 23 healthcare properties which are to be sold).