Oct. 23, 2013, 11:45 AM
- "This is taking the number two and number three net-lease REITs and creating kind of a game-over, category-killer in the sector," says Cole Real Estate (COLE +8.7%) CEO Marc Nemer of the deal to sell itself to American Realty Capital Properties (ARCP -1.5%) for $11.2B in cash and stock. The combined company will push into first place in size in the popular triple-net-lease sector, surpassing Realty Income (O +0.7%).
- ARCP's acquisition-happy chief Nicholas Schorsch in the past has typically raised private money for non-traded REITs and then sold the portfolios to ARCP in order to cash out his investors, but this is a massive public deal. "How many REITs have the ability to raise both public and private capital," he says. "The ability for us to acquire non-traded REITs, either whole or in part, is only increased" by this Cole deal.
- S&P 500 inclusion next? The investor presentation (slide 8) notes the combined company's market cap will be larger than index constituents Kimco Realty and Macerich.
- Under the impression the CEOs of the two companies hated each other, SNL Financial's Jake Mooney wants the backstory. Earlier this year: Still a non-traded REIT, Cole rebuffs ARCP's buyout attempt for $9.7B.
- Earlier today: The deal announcement.
- Other triple-net players: National Retail (NNN +1.2%), W.P. Carey (WPC +1%), Spirit Realty (SRC +3.2%), EPR Properties (EPR +0.8%).
NNN vs. ETF Alternatives
National Retail Properties Inc is a fully integrated real estate investment trust. It acquires, owns, invests in and develops properties that are leased primarily to retail tenants under long-term net leases and primarily held for investment.
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