CIM Group buys Cole Capital from VEREIT

VEREIT will sell its Cole Capital investment management business to an affiliate of CIM Group. Cole Capital holds some $7.6 billion in assets under management. It also manages five public, nonlisted REITs: Cole Credit Property Trust IV; Cole Credit Property Trust V; Cole Office & Industrial REIT (CCIT) II; Cole Office & Industrial REIT (CCIT) III; and Cole Real Estate Income Strategy.

In connection with the transaction, VEREIT may receive up to $200 million — comprising about $120 million in cash payable at closing under the purchase agreement, and as much as $80 million in fees to be paid under a six-year services agreement based on Cole Capital’s future revenues. Among other things, the services agreement will require VEREIT to provide operational real estate support to Cole Capital for approximately one year.

All this gives VEREIT a chance to concentrate on its real estate operating side, while CIM gains expertise in the net-lease finance sector, according to Richard Ressler, a CIM co-founder and principal.

“The transaction allows us to simplify our core business model and focus on our large, diversified single-tenant real estate portfolio,” said Glenn Rufrano, chief executive officer of VEREIT. “Cole Capital will have a sponsor in CIM with an institutional foundation and established distribution relationships with wire houses.”