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Cole Real Estate Investment sent a letter to financial advisors this week underscoring its plans to exit a 20.6 million-square-foot, triple net leased portfolio accumulated by its affiliate, Cole Credit Property Trust II.
"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," wrote Marc T. Nemer, president of Cole Real Estate Investment. "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," he wrote. "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."
As of year-end 2010, CCPT II owned 725 properties comprising 20.6 million rentable square feet of single and multi-tenant retail and commercial space located in 45 states and the U.S. Virgin Islands. It also owned 69 mortgage notes receivable secured by 43 restaurant properties and 26 single-tenant retail properties, each of which is subject to a net lease. Through two joint ventures, it had a majority indirect interest in a 386,000-square-foot multi-tenant retail building in Independence, MO, and a majority indirect interest in a 10-property storage facility portfolio.
Circle K convenience stores accounted for 83 of the leases in the portfolio, Walgreens, 58; and CVS, 35.
The largest concentration of properties was in Texas (165 with 3.58 million square feet); Florida properties totaled 22 with 2.07 million square feet; Illinois, 23 properties with 1.74 million square feet; and Georgia 57 properties with 1.01 million.
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