AMERICAN FINANCE TRUST COMPLETES PREVIOUSLY ANNOUNCED $261 MILLION SALE OF OFFICE BUILDINGS, REDUCING OFFICE EXPOSURE TO 1%
Strategic and Financial Rationale
- Immediately Accretive to AFFO: The Transaction is expected to be accretive immediately upon closing, adding significant scale and value with pandemic-tested assets
- Amplified Scale: Strategic acquisition of a 9.5 million square foot, 81-property portfolio of power, anchored, and grocery centers3 under contract to be acquired for
- Office Concentration Reduced to 1% of SLR: Opportunistic and accretive
$261 milliondisposition of the Company's Sanofi office asset and $1.3 billionportfolio acquisition reduced Pro Forma SLR4 derived from office assets to 1% from 7%
- Realized Cap Rate Compression on Sanofi Disposition: Disposition Cash Cap Rate of 6.38% is 15bps lower than the Cash Cap Rate at time of acquisition in 2014, generating a
$10 millionincrease on its original purchase price
- Addition of Grocery Centers: 22% of Pro Forma multi-tenant SLR derived from grocery centers, which we expect to enhance the desirability of the Company's properties and ability to command strong rental rates
Rebranded Companyfocused on Where America Shops: The Necessity Retail REIT (NYSE: RTL) will be the preeminent REIT focused on Necessity-Based retail, with a portfolio that, on a Pro Forma basis, as of September 30, 2021, was 55% leased to Service-Oriented or Necessity-Based retail tenants.
As previously announced, in connection with the Transaction, the Company will change its name and be rebranded as "The Necessity Retail REIT Where
For acquisitions, cash cap rate is a rate of return on a real estate investment property based on the expected, annualized cash rental income during the first year of ownership that the property will generate under its existing lease or leases. For dispositions, cash cap rate is a rate of return based on the annualized cash rental income of the property to be sold. For acquisitions, cash cap rate is calculated by dividing this annualized cash rental income the property will generate (before debt service and depreciation and after fixed costs and variable costs) by the purchase price of the property, excluding acquisition costs. For dispositions, cash cap rate is calculated by dividing the annualized cash rental income by the contract sales price for the property, excluding acquisition costs Weighted average cash cap rates are based on square feet unless otherwise indicated.
All pro forma numbers are as of
Portfolio to be acquired includes 79 Power, Anchored and Grocery Centers and two single tenant properties.
Pro Forma represents, as of
The statements in this press release that are not historical facts may be forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results or events to be materially different. The words "anticipates," "believes," "expects," "estimates," "projects," "plans," "intends," "may," "will," "seek," "would" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of the Company's control, which could cause actual results to differ materially from the results contemplated by the forward-looking statements. These risks and uncertainties include the potential adverse effects of the ongoing global COVID-19 pandemic, including actions taken to contain or treat COVID-19, on the Company, the Company's tenants, the assets under contract to be acquired including their respective tenants and the global economy and financial markets and that any potential future acquisition of property is subject to market conditions and capital availability and may not be identified or completed on favorable terms, or at all, as well as those risks and uncertainties set forth in the Risk Factors section of the Company's Annual Report on Form 10-K for the year ended
A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time. Each rating agency has its own methodology for assigning ratings and, accordingly, each rating should be evaluated independently of any other rating.
Non-GAAP Financial Measures
This release discussed the non-GAAP financial measure Adjusted Funds From Operations ("AFFO"). A description of this non-GAAP measures and reconciliations to the most directly comparable GAAP measure, which is net income, is provided on our press release furnished as Exhibit 99.1 with our Current Report on Form 8-K on
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