NEW YORK, Feb. 14, 2022 /PRNewswire/
-- American Finance Trust, Inc. (Nasdaq: AFIN) ("AFIN"
or the "Company") announced today that the Company, through its
operating partnership, completed the initial acquisition of 44
open-air shopping centers for a total of $547 Million, excluding closing costs (the
"Closing"). The Closing is the first tranche of acquisitions from
the previously announced definitive agreement to acquire a
portfolio of 79 Power, Anchored and Grocery Centers and two single
tenant properties (the "Transaction") from certain subsidiaries of
CIM Real Estate Finance Trust, Inc. for $1.3
billion, representing a 7.19% cash capitalization rate. The
Company expects to acquire the remaining properties in the
Transaction by the end of the first quarter, 2022. Upon completing
the Transaction, the Company will be the preeminent REIT focused on
Necessity-Based retail with a best-in-class portfolio that will
comprise over 1,000 properties, 29 million square feet and
$382 million in Pro-Forma1
annualized straight-line rent.
As previously announced, as of February
10, 2022 the Company's name changed to The Necessity Retail
REIT, Inc. "Where America Shops". On February 15, 2022, the Company will begin trading
under the new ticker "RTL". Information about The Necessity Retail
REIT, Inc. ("RTL"), including news, SEC Filings and portfolio
information can be found on the Company's website at
www.necessityretailreit.com.
"Today's acquisition of 44 open-air shopping centers featuring
necessity-retail tenants makes this the ideal time to complete our
rebranding to The Necessity Retail REIT," said Michael Weil, CEO of RTL. "Together with the
previously announced disposition of three office buildings leased
to Sanofi, which we sold in January at a 6.38% cash capitalization
rate, we are well on our way to being the leading REIT that is
focused on assets leased to necessity-retail tenants. Upon
completing the Transaction, approximately 43% of our Pro-Forma SLR
will come from high-growth markets, primarily in the Sun Belt, and
our portfolio will be increasingly representative of where America
shops every day, including a significant concentration on desirable
grocery-anchored shopping centers. We look forward to acquiring the
remaining properties in the Transaction later this quarter."
Strategic and Financial Rationale for the Transaction
- Immediately Accretive to AFFO: Expected to be accretive
immediately upon closing of the Transaction, 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
centers acquired for $1.3
billion
- Addition of Grocery Centers: 22% of Pro Forma
multi-tenant SLR is derived from grocery centers, which is expected
to enhance the desirability of the Company's properties and ability
to command strong rental rates
- Office Concentration Reduced to 1%: Opportunistic and
accretive $261 million disposition of
non-core Sanofi office asset at a price more than $10 million above the original purchase price,
reducing Pro Forma SLR derived from office assets to 1% from
7%
Pro Forma Metrics1
After closing the Transaction, AFIN will be the preeminent
retail REIT focused on Necessity-Based properties, consisting of
tenants where Americans shop every day. The Pro Forma portfolio
will feature:
- Real estate investments, at cost of approximately $5 billion, excluding closing costs
- 1,048 properties totaling 28.8 million square feet
- Portfolio annualized straight-line rent of approximately
$382 million
- Portfolio occupancy of 92.3%
- Multi-tenant occupancy of 89.5%, Executed Occupancy2
Plus Leasing Pipeline3 of 90.4%
- Portfolio weighted-average remaining lease term of 7.5
years
- Top ten tenant base that is 65% investment grade
rated4
- 1% office exposure
- The ten largest tenants are expected to be Truist (4% of
annualized straight-line rent), Fresenius (3.9%), Mountain Express
Oil Co. (3.5%), AmeriCold (3.4%), Home Depot (3.3%), PetSmart
(2.6%), Stop & Shop (2.5%), Dick's Sporting Goods (2.3%),
Bob Evans (2.2%) and Best Buy
(2.2%)
- The ten largest industries are expected to be Discount Retail
(8% of annualized straight-line rent), Gas/Convenience (7%),
Specialty Retail (7%), Healthcare (6%), Grocery (5%), Quick Service
Restaurant (5%), Home Improvement (5%), Retail Banking (5%),
Apparel Retail (5%), Full-Service Restaurant (4%)
Name Change
As of February 10, 2022 the
Company changed its name to "The Necessity Retail REIT, Inc." and
rebranded as "The Necessity Retail REIT Where America
Shops." Beginning February 15,
2022 the Company's Class A common stock ("Common
Stock"), 7.50% Series A Cumulative Redeemable Perpetual Preferred
Stock ("Series A Preferred Stock") and 7.375% Series C Cumulative
Redeemable Perpetual Preferred Stock ("Series C Preferred Stock")
will begin trading on Nasdaq thereafter under the ticker symbols
RTL, RTLPP and RTLPO, respectively.
Footnotes/Definitions
1 Pro Forma is as of September 30, 2021 and represents the combined
AFIN and 81 property multi-tenant portfolio, including two single
tenant assets for $16.5 million that
encompass 86,810 square feet and $1.2
million of annualized straight-line rent, acquired and under
the PSA with certain subsidiaries of CIM Real Estate Finance Trust,
Inc. as of September 30, 2021,
excluding AFIN's Sanofi office asset which was sold in January.
2 Executed Occupancy includes Occupancy as of a
particular date as well as all leases fully executed by both
parties as of the same date where the tenant has yet to take
possession as of such date. For Q3'21 and as of November 1, 2021, there are 15 additional leases
executed where rent commences over time between the fourth quarter
of 2021 and the first quarter of 2022 totaling approximately
122,000 square feet.
3 For AFIN, Leasing Pipeline for Q3'21 includes
i) all leases fully executed by both parties as of November 1, 2021, but after September 30, 2021 and (ii) all leases under
negotiation with an executed LOI by both parties as of November 1, 2021. This represents six LOIs
totaling approximately 19,000 square feet. No lease terminations
occurred during this period. For the Transaction and Q3'21,
includes a 13,000 SF Leasing Pipeline acquired in the Transaction.
There can be no assurance that LOIs will lead to definitive leases
that will commence on their current terms, or at all. Leasing
pipeline should not be considered an indication of future
performance.
4 As used herein, investment grade includes both
actual investment grade ratings of the tenant or guarantor, if
available, or implied investment grade. Implied investment grade
may include actual ratings of tenant parent, guarantor parent
(regardless of whether or not the parent has guaranteed the
tenant's obligation under the lease) or by using a proprietary
Moody's analytical tool, which generates an implied rating by
measuring a company's probability of default. The term "parent" for
these purposes includes any entity, including any governmental
entity, owning more than 50% of the voting stock in a tenant.
Ratings information is as of September 30,
2021 and based on annualized straight line rent.
About The Necessity Retail REIT Where America
Shops
The Necessity Retail REIT (Nasdaq: RTL) is a publicly
traded real estate investment trust listed on Nasdaq focused on
acquiring and managing a diversified portfolio of primarily
service-oriented and traditional retail and distribution related
commercial real estate properties in the U.S. Additional
information about RTL can be found on its website at
www.necessityretailreit.com.
Important Notice
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
December 31, 2020 filed on
February 25, 2021 and all other
filings with the SEC after that date as such risks, uncertainties
and other important factors may be updated from time to time in the
Company's subsequent reports including in particular the Company's
Current Report on Form 8-K dated December
20, 2021 and describing additional facts and risk factors
relating to the transaction described in this release. In
particular, the transactions described in this release are subject
to closing conditions, including conditions that are outside of the
Company's control, and the transactions described in this release
may not be completed on the contemplated terms, or at all, or they
may be delayed. The Company may not be able to obtain financing to
acquire the remaining properties. Forward looking statements speak
only as of the date they are made, and the Company undertakes no
obligation to update or revise any forward-looking statement to
reflect changed assumptions, the occurrence of unanticipated events
or changes to future operating results, unless required to do so by
law.
Non-GAAP Financial Measures
This release discussed the non-GAAP financial measure Adjusted
Funds From Operations ("AFFO"). A description of these 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
November 3, 2021. In addition, please
see the press release for statements as to why the Company believes
that this measure is useful to investors and additional purposes
for the Company's use of this measure.
Contacts:
Investor Relations
ir@rtlreit.com
(866) 902-0063
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SOURCE American Finance Trust, Inc.