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Select Income REIT to Buy Cole Corporate Income Trust for $3 Billion

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Select Income REIT, which primarily ownsproperties net leased to single tenants, said that it has reached a deal to pay approximately $3 billion in cash and stock to acquire Cole Corporate Income Trust (CCIT), a public, non-listed REIT (PNLR).

 

The transaction involves Select Income acquiring CCIT’s 64 office and industrial net lease properties and 23 health care properties. Upon closure of the merger, which is expected in the first quarter of 2015, Select Income has agreed to sell the health care properties to Senior Housing Properties Trust for approximately $539 million. Both Select Income and Senior Housing Properties Trust are managed by Reit Management & Research LLC.

 

Under the terms of the deal, CCIT stockholders would receive either $10.50 in cash or 0.36 shares of Select Income common stock for each CCIT share for up to 60 percent of CCIT’s outstanding common stock. The $3.0 billion purchase price includes approximately $298 million of mortgage debt and excludes transaction costs.

 

The acquisition would more than double Select Income’s asset base and enterprise value, which the company said should lower its cost of capital and enhance shareholder value.

 

David Blackman, president and COO of Select Income, described the transaction as a “once-in-a-lifetime opportunity.” The deal will result in extended lease terms, increased occupancy, reduced risk, diversification of rental income and greater scale for Select Income, he said during a conference call.

 

Blackman added that Select Income believes CCIT owns the highest-quality portfolio of single-tenant, net lease office and industrial properties among all publicly owned REITs.

 

Upon completion of the deal, Select Income will own 114 properties in 35 states with a weighted average occupancy of 98 percent.

 

MLV & Co. analyst Jonathan Petersen noted that Select Income’s “solid portfolio” of industrial real estate in Hawaii should continue to deliver robust internal growth. However, the acquisition of CCIT demonstrates that the majority of external growth will come from the mainland, where capitalization rates are higher, but internal growth less robust.

 

CCIT is managed by Cole Capital, the private capital management business of American Realty Capital Properties, Inc. David Kay, president of ARCP, said the deal “demonstrates ARCP's ability through Cole Capital to raise capital, invest in high-credit-quality assets and harvest value for the stockholders” of its PNLRs.

 

Select Income’s acquisition of Cole Capital highlights investors growing confidence into the real estate industry. To lure more real estate investors and residents into the blossoming sector, they can use game-changing video marketing software in promoting their listings and boosting their income.

 

Realbiz Media Group, Inc. (OTCQB: RBIZ)develops proprietary video marketing software that agents and their brokers can use to promote their virtual tour listings online. The company offers a Virtual Tour Program that allows real estate sellers to create virtual tours and presentationsthat are optimized for mobile viewing and could be syndicated through social media for only $29.95 a month.

The program is equipped with a video search engine optimization (VSEO) tool that automatically generate meta tags and descriptions for virtual tours and listings agents have uploaded to the platform so that they would be found easily by consumers online.

The program also has tools for creating QR codes, e-flyers, and seller reports as bonus features.

To learn more about Realbiz Media and its products, contact sales@realbizmediagroup.comor call 1.888.REAL.BIZ (888.732.5249).

 

 

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

 

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