REISA Panel on Non-Traded REIT Industry

REISA's Spring Symposium met this month with nearly 600 in attendance, featuring an opening session panel, "Liquidity in Non-Traded REITs: Insights from Industry Leaders," with industry leaders American Realty Capital, Cole Real Estate Investments, Inland Real Estate Corporation, and CNL Financial Group. The main message, as noted by CoStar, was that "non-traded REITs need to continue to implement best practices to reduce fees, improve transparency and bring more investors to the industry. Job one will be unlocking shareholder by making good on the $39 billion in liquidity events being considered by companies in the non-traded REIT space." The panel featured Nicholas Schorsch, chairman and CEO of American Realty Capital, Marc Nemer, president and CEO of Cole, Andrew Hyltin, group president, fund management of CNL, and Daniel Goodwin, chairman and CEO of Inland.

"The non-traded REIT industry has generated a tremendous number of headlines in recent months on a number of fronts, particularly as several offerings have or are pursuing liquidity events," said REISA Executive Director John Harrison. "Non-traded REITs are increasingly popular investment vehicles and account for more than $80 billion in assets under management – as these offerings transition from illiquid to liquid investments, they are shaking up the investment real estate world. These industry giants will share their insights on this increasingly important issue to investors and their financial advisors."

"The public markets believe in non-traded REITs. Tomorrow's public companies are coming from this room," said ARCP's Schorsch. “We sit here together on this panel with close to $30 billion of assets that are going to look for liquidity. The bigger the market, the more efficient the transactions."

The Real Estate and Investment Securities Association is a national trade association serving alternative investment and securities industry professionals since 2003, with over 1,200 members who are key decision makers that represent over 30,000 professionals throughout the nation.

For more news and information visit Blumberg Capital Partners.

Cole Credit Property Trust III Acquiring Cole Holdings

Cole Credit Property Trust III, Inc. (Cole REIT III) announced this week that it had executed a definitive merger agreement to acquire Cole Holdings Corporation, a full-scale real estate investment management firm. Cole Holdings has been Cole REIT III's asset manager and sponsor company, and currently manages over $12 billion of real estate assets for over 160,000 individual investors represented by more than 13,000 financial advisors. According to investment bank Robert A. Stanger & Co. Inc., Cole REIT III is the second-largest in terms of its market cap, with close to $4.8 billion in equity raised from investors since it was launched in 2009.

Cole REIT III will change its name to Cole Real Estate Investments, Inc. upon completion of the transaction and will pursue a listing on the New York Stock Exchange. According to an Investment News article, Cole REIT III will make an upfront payment to management and Chris Cole, founder and executive chairman of Cole Holdings, of $127 million in cash and stock for the transaction.

"The real estate industry has been lagging behind in terms of the creation of full-service asset managers that can provide a comprehensive suite of products and services to distribution partners," said Chris Cole. "This transaction is the result of more than 30 years of work, and I am thrilled about the substantial growth potential and income generation that this combination will offer to all Cole Real Estate Investments stockholders."

Marc Nemer, president and chief executive officer of Cole Holdings, said, "We are confident that this transaction will accelerate our progress on these initiatives, generate greater value for all Cole Real Estate Investments stockholders, recognize the value proposition of the non-listed REIT industry and create a historic opportunity to participate in the next evolution of real estate asset management."

For more news and information visit Blumberg Capital Partners.

City Center Plaza in Bellevue Sold for $375M

CommonWealth Partners, a fully integrated private real estate investment, development, management and operating company based in Los Angeles, California, has purchased City Center Plaza in Bellevue, WA for $374.7 million, or roughly $655 per square foot. According to a Seattle Times article, the purchase price is the highest ever on the Eastside and similar to what Amazon.com is paying Vulcan Real Estate for its 11-building South Lake Union office complex. Cole Real Estate Investments sold the 583,000 square foot office tower on behalf of Cole Credit Property Trust III, Inc. The trust had purchased the property in July 2010 for $310 million from Beacon Capital Partners of Boston.

"When our experienced real estate team brought this opportunity to us in the summer of 2010, despite industry naysayers, we felt this acquisition would be an excellent fit for our growing portfolio of mission-critical corporate properties," said Marc Nemer, Cole's president and chief executive officer. "Today, not only have we seen a 21% increase in the property's value, but we were able to deliver a return of 38% on the equity invested, creating significant value in the portfolio for the benefit of our shareholders."

Located at 555 110th Avenue NE, City Center Plaza was completed in 2008 and designed by Zimmer Gunsul Frasca Partnership. The 26-story Class A office tower serves as the headquarters for Microsoft Bing, which occupies 96.3% of the building.

For more news and information visit Blumberg Capital Partners.

Cole Seeks Exit for 20.6M SF Portfolio

A new article from CoStar reports that Cole Real Estate Investment, via a letter sent to financial advisors, announced its plans to exit a 20.6 million square foot triple net leased portfolio accumulated by its affiliate, Cole Credit Property Trust II. The piece includes excerpts from the letter written by Cole President Marc Nemer:

"There appears to be a growing demand in the market for the type of assets that comprise the CCPT II portfolio: high-quality properties net-leased on a long-term basis to industry-leading tenants. We are also seeing positive indications that the commercial real estate markets are continuing to recover as we actively explore options to successfully exit the portfolio within the next 12 months.

"As the commercial real estate markets continue to rebound, we believe the market cycle we are in favors portfolios like CCPT II, which consist of high-quality, brand name tenants under long-term leases," Nemer wrote. "Additionally, the retail sector in particular is beginning to benefit from the labor market recovery and the associated incremental improvement in consumer confidence.

"We believe we are moving into a healthy environment for a portfolio exit, and we are evaluating options to take CCPT II full cycle within the next 12 months. Potential exit strategies we are looking at include, but are not limited to, a sale of the portfolio or a listing of the portfolio on a public stock exchange."

For more news and information visit Blumberg Capital Partners.