Realty Income to Buy $1.3B Retail Portfolio

In addition to more than 450 single-tenant commercial assets, the buyer will pick up approximately $131 million of debt held by the seller.
One of CIM's Dollar General stores at 1455 Gears Road in Houston. Image via Google Street View
One of CIM’s Dollar General stores at 1455 Gears Road in Houston. Image via Google Street View

CIM Group has agreed to sell a fully leased retail portfolio of 454 assets totaling 5.1 million square feet to Realty Income Corp. for $1.3 billion in cash. The majority of the acquisitions will occur in various tranches before year-end.

In addition to the single-tenant properties, Realty Income will assume an estimated $131 million of the seller’s debt, which bears interest at a weighted rate of 4.5 percent and has a weighted remaining term of 5.3 years. The transactions involving mortgage assumptions are estimated to close by the end of the second quarter next year. Eastdil Secured acted on behalf of CIM in the deal.

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The buildings are spread across 41 states, with Dollar General the largest tenant, occupying 145 structures and accounting for 15.8 percent of the portfolio’s total rental income. Other retailers in the assets include dollar, convenience and drug stores, restaurants and grocers. The average weighted remaining lease term for the properties is 9.7 years.

CIM Real Estate Finance Trust, the subsidiary of CIM involved in the deal, will be left with a 20.1 million-square-foot portfolio following the deal’s close. The firm intends to push forward with plans to sell more selected retail assets in the next two years as it transitions into a mortgage REIT.