Jan 22 Spirit Realty Capital Inc said it
will merge with Cole Credit Property Trust II to create a
commercial real estate firm with a combined enterprise value of
The combined company, which will own or have an interest in
2,012 properties in 48 states, would be the second largest
publicly traded triple-net-lease real estate investment trust in
the United States.
Triple net lease is a lease agreement where the tenant pays
the property taxes, building insurance and maintenance in
addition to rent. Such properties are usually rented out for
commercial purposes to retailers, supermarkets and restaurants.
Spirit's shares jumped 7.4 percent to $19.14 on Tuesday on
the New York Stock Exchange.
Cole Credit will be the majority owner of the new company
with a 56 percent stake but the current Spirit management would
run the company.
"The merger further diversifies us both geographically and
by industry, reduces our tenant concentration, improves the
overall credit quality of our portfolio and increases operating
efficiency," Spirit Chief Executive Tom Nolan said in a
statement on Tuesday.
The new company's top tenants would include Shopko, Walgreen
Co and CVS Caremark Corp.
The addition of Cole Credit's portfolio doubles the size of
Scottsdale, Arizona-based Spirit, backed by Macquarie Group
(US) Holdings and hedge fund TPG-Axon, completed an initial
public offering in September.
The deal is expected to slightly add to Spirit's funds from
operations following closing.
Barclays advised Spirit Realty, while Morgan Stanley and UBS
advised Cole Credit.