Filed Pursuant to Rule 424(b)(3)
Registration No. 333-169533
COLE CREDIT PROPERTY TRUST IV, INC.
SUPPLEMENT NO. 2 DATED MAY 9, 2013
TO THE PROSPECTUS DATED MAY 1, 2013
This document supplements, and should be read in conjunction with, the prospectus of Cole Credit Property Trust IV, Inc. dated May 1, 2013 and Supplement No. 1 dated May 1, 2013. Unless otherwise defined in this supplement, capitalized terms used in this supplement shall have the same meanings as set forth in the prospectus.
The purpose of this supplement is to describe the following: |
| | |
(1) | | the status of the offering of shares of Cole Credit Property Trust IV, Inc.; |
(2) | | recent real property investments and placement of debt on certain real property investments; and |
(3) | | potential real property investments. |
Status of Our Public Offering
The registration statement for our initial public offering of 300,000,000 shares of common stock was declared effective by the Securities and Exchange Commission on January 26, 2012. Of these shares, we are offering up to 250,000,000 shares in a primary offering and up to 50,000,000 shares pursuant to our distribution reinvestment plan. As of May 3, 2013, we had accepted investors’ subscriptions for, and issued, approximately 53.6 million shares of our common stock in the offering (including shares issued pursuant to our distribution reinvestment plan), resulting in gross proceeds to us of approximately $533.7 million.
We will offer shares of our common stock pursuant to the offering until January 26, 2014, unless all shares being offered have been sold, in which case the offering will be terminated. If all of the shares we are offering in the offering have not been sold by January 26, 2014, we may extend the offering as permitted under applicable law. In addition, at the discretion of our board of directors, we may elect to extend the termination date of our offering of shares reserved for issuance pursuant to our distribution reinvestment plan until we have sold all shares allocated to such plan through the reinvestment of distributions, in which case participants in the plan will be notified. The offering must be registered in every state in which we offer or sell shares. Generally, such registrations are for a period of one year. Thus, we may have to stop selling shares in any state in which our registration is not renewed or otherwise extended annually. We reserve the right to terminate this offering at any time prior to the stated termination date.
Recent Real Property Investments
The following information supplements, and should be read in conjunction with, the section of our prospectus captioned “Prospectus Summary – Description of Real Estate Investments” on page 11 of the prospectus.
Description of Real Estate Investments
As of May 3, 2013, our investment portfolio consisted of 141 properties located in 30 states, consisting of approximately 4.2 million gross rentable square feet of commercial space. We acquired 20 properties between April 5, 2013 and May 3, 2013, which are listed below in order of their date of acquisition.
|
| | | | | | | | | | | | | |
| | | | | | | | Rentable | | |
| | | | Number of | | | | Square | | Purchase |
Property Description | | Type | | Tenants | | Tenant(s) | | Feet (1) | | Price |
Tractor Supply – Stuttgart, AR | | Home and Garden | | 1 | | Tractor Supply Company | | 19,097 |
| | $ | 2,785,715 |
|
Walgreens – Birmingham, AL | | Drugstore | | 1 | | Walgreen Co. | | 13,076 |
| | 7,113,675 |
|
Dollar General – Alliance, NE | | Discount Store | | 1 | | Dolgencorp, LLC | | 9,026 |
| | 1,008,297 |
|
Sunoco – Various (2) | | Convenience Store | | 11 | | Sunoco, Inc. (R&M) | | 32,923 |
| | 26,143,542 |
|
Waterford Park South – Clarksville, IN | | Shopping Center | | 9 | | Various | | 91,971 |
| | 13,400,000 |
|
The Plant – San Jose, CA (3) | | Shopping Center | | 59 | | Various | | 509,614 |
| | 203,100,000 |
|
Natural Grocers – Lubbock, TX | | Grocery | | 1 | | Vitamin Cottage Natural Food Markets, Inc. | | 15,185 |
| | 5,250,000 |
|
Kum & Go – Various (4) | | Convenience Store | | 4 | | Kum & Go, LC | | 19,947 |
| | 10,996,000 |
|
| | | | | | | | 710,839 |
| | $ | 269,797,229 |
|
|
| | | |
| | | |
(1) | | Includes square feet of buildings that are on land subject to ground leases. |
(2) | | The Sunoco portfolio consists of nine single-tenant properties and one multi-tenant property with two tenants, |
| | all of which are located in Florida. |
(3) | | This real property investment was previously disclosed in Supplement No. 1 dated May 1, 2013. |
(4) | | The Kum & Go portfolio consists of four single-tenant properties located in Arkansas, Iowa and Missouri. |
The following information supplements, and should be read in conjunction with, the section of our prospectus captioned “Investment Objectives and Policies – Real Property Investments” beginning on page 109 of the prospectus.
Real Property Investments
As of May 3, 2013, we, through separate wholly–owned limited liability companies and limited partnerships, owned 141 properties located in 30 states, consisting of approximately 4.2 million gross rentable square feet of commercial space. The properties generally were acquired through the use of proceeds from our initial public offering and from available borrowings. We acquired 20 properties between April 5, 2013 and May 3, 2013, which are listed below in order of their date of acquisition.
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| | | | | | | | | | | | | | | | | | | | | |
| | | | Year | | Purchase | | Fees Paid to | | Initial | | Average | | Physical |
Property Description | | Date Acquired | | Built | | Price | | Sponsor (1) | | Yield (2) | | Yield (3) | | Occupancy |
Tractor Supply – Stuttgart, AR | | April 5, 2013 | | 2013 | | $ | 2,785,715 |
| | $ | 55,714 |
| | 7.00 | % | | 7.73 | % | | 100 | % |
Walgreens – Birmingham, AL | | April 9, 2013 | | 2012 | | 7,113,675 |
| | 142,274 |
| | 6.15 | % | | 6.15 | % | | 100 | % |
Dollar General – Alliance, NE | | April 9, 2013 | | 2013 | | 1,008,297 |
| | 20,166 |
| | 7.40 | % | | 7.47 | % | | 100 | % |
Sunoco – Cocoa, FL | | April 12, 2013 | | 1987 | | 1,851,544 |
| | 37,031 |
| | 7.45 | % | | 8.97 | % | | 100 | % |
Sunoco – Lake Worth, FL | | April 12, 2013 | | 2011 | | 2,971,647 |
| | 59,433 |
| | 7.25 | % | | 9.97 | % | | 100 | % |
Sunoco – Merritt Island, FL | | April 12, 2013 | | 1986 | | 2,120,134 |
| | 42,403 |
| | 7.70 | % | | 9.28 | % | | 100 | % |
Sunoco – Palm Beach Gardens, FL | | April 12, 2013 | | 2009 | | 4,844,321 |
| | 96,886 |
| | 7.75 | % | | 9.64 | % | | 100 | % |
Sunoco – Palm City, FL | | April 12, 2013 | | 2011 | | 2,939,975 |
| | 58,800 |
| | 7.25 | % | | 9.90 | % | | 100 | % |
Sunoco – Sebastian, FL | | April 12, 2013 | | 2009 | | 3,029,487 |
| | 60,590 |
| | 7.35 | % | | 9.17 | % | | 100 | % |
Sunoco – Titusville (Garden), FL | | April 12, 2013 | | 2009 | | 3,709,652 |
| | 74,193 |
| | 7.35 | % | | 9.25 | % | | 100 | % |
Sunoco – Titusville (Sisson), FL | | April 12, 2013 | | 1986 | | 1,851,544 |
| | 37,031 |
| | 7.94 | % | | 9.52 | % | | 100 | % |
Sunoco – West Palm Beach (Forest Hill), FL | | April 12, 2013 | | 1977 | | 1,366,333 |
| | 27,327 |
| | 7.46 | % | | 8.98 | % | | 100 | % |
Sunoco – West Palm Beach, FL | | April 12, 2013 | | 1999 | | 1,458,905 |
| | 29,178 |
| | 7.47 | % | | 8.99 | % | | 100 | % |
Waterford Park South – Clarksville, IN | | April 12, 2013 | | 2006 | | 13,400,000 |
| | 268,000 |
| | 6.53 | % | | 8.39 | % | | 100 | % |
The Plant – San Jose, CA (4) | | April 15, 2013 | | 2008 | | 203,100,000 |
| | 4,062,000 |
| | 7.09 | % | | 8.12 | % | | 95 | % |
Natural Grocers – Lubbock, TX | | April 22, 2013 | | 2013 | | 5,250,000 |
| | 105,000 |
| | 7.79 | % | | 7.89 | % | | 100 | % |
Kum & Go – Urbandale, IA | | May 3, 2013 | | 2010 | | 2,624,000 |
| | 52,480 |
| | 7.15 | % | | 8.10 | % | | 100 | % |
Kum & Go – Mount Vernon, MO | | May 3, 2013 | | 2010 | | 2,711,000 |
| | 54,220 |
| | 7.15 | % | | 8.11 | % | | 100 | % |
Kum & Go – Fairfield, IA | | May 3, 2013 | | 2011 | | 2,607,000 |
| | 52,140 |
| | 7.14 | % | | 8.06 | % | | 100 | % |
Kum & Go – Bentonville, AR | | May 3, 2013 | | 2011 | | 3,054,000 |
| | 61,080 |
| | 7.15 | % | | 8.09 | % | | 100 | % |
| | | | | | $ | 269,797,229 |
| | $ | 5,395,946 |
| | | | | | |
|
| | | |
| | | |
(1) | | Fees paid to sponsor are payments made to an affiliate of our advisor for acquisition fees in connection with the |
| | property acquisition. For more detailed information on fees paid to our advisor or its affiliates, see the section |
| | captioned “Management Compensation” beginning on page 79 of the prospectus. |
(2) | | Initial yield is calculated as the effective annualized rental income, adjusted for any rent concessions or abatements, |
| | if any, for the in-place leases at the respective property divided by the property purchase price, exclusive of |
| | acquisition costs and acquisition fees paid to our advisor or its affiliates. In general, our properties are subject to |
| | long-term triple net or double net leases, and the future costs associated with the double net leases are unpredictable |
| | and may reduce the yield. We expect the majority of our properties will be subject to triple net leases. Accordingly, |
| | our management believes that effective annualized rental income is a more appropriate figure from which to |
| | calculate initial yield than net operating income. |
(3) | | Average yield is calculated as the average annual rental income, adjusted for any rent concessions or abatements, if |
| | any, for the in-place leases over the non-cancelable lease term at the respective property divided by the property |
| | purchase price, exclusive of acquisition costs and acquisition fees paid to our advisor or its affiliates. In general, |
| | our properties are subject to long-term triple net or double net leases, and the future costs associated with the |
| | double net leases are unpredictable and may reduce the yield. We expect the majority of our properties will be |
| | subject to triple net leases. Accordingly, our management believes that average annual rental income is a more |
| | appropriate figure from which to calculate average yield than net operating income. |
(4) | | This real property investment was previously disclosed in Supplement No. 1 dated May 1, 2013. |
The following table sets forth the principal provisions of the lease term for the major tenants at each of the properties listed above:
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| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | Effective | | | | |
| | | | Total | | % of Total | | | | Effective | | Base | | | | |
| | | | Square | | Rentable | | Renewal | | Annual | | Rent per | | | | |
| | Major | | Feet | | Square | | Options | | Base | | Square | | | | |
Property | | Tenants (1) | | Leased | | Feet | | (2) | | Rent (3) | | Foot (3) | | Lease Term (4) |
Tractor Supply – Stuttgart, | | Tractor Supply | | 19,097 |
| | 100% | | 4/5 yr. | | $ | 195,000 |
| | $ | 10.21 |
| | 4/5/2013 | - | 1/31/2018 |
AR | | Company | | | | | | | | 214,500 |
| | 11.23 |
| | 2/1/2018 | - | 1/31/2023 |
| | | | | | | | | | 235,950 |
| | 12.36 |
| | 2/1/2023 | - | 1/31/2028 |
Walgreens – Birmingham, AL | | Walgreen Co. | | 13,076 |
| | 100% | | (5) | | 437,491 |
| | 33.46 |
| | 4/9/2013 | - | 9/30/2037 |
Dollar General – Alliance, | | Dolgencorp, LLC | | 9,026 |
| | 100% | | 4/5 yr. | | 74,616 |
| | 8.27 |
| | 4/9/2013 | - | 2/28/2023 |
NE | | | | | | | | | | 76,848 |
| | 8.51 |
| | 3/1/2023 | - | 2/29/2028 |
Sunoco – Cocoa, FL | | Sunoco, Inc. (R&M) | | 4,500 |
| | 100% | | 3/5 yr. | | 137,940 |
| (6) | 30.65 |
| | 4/12/2013 | - | 3/31/2027 |
Sunoco – Lake Worth, FL | | Sunoco, Inc. (R&M) | | 3,380 |
| | 100% | | 3/5 yr. | | 215,444 |
| (6) | 63.74 |
| | 4/12/2013 | - | 3/18/2031 |
Sunoco – Merritt Island, FL | | Sunoco, Inc. (R&M) | | 3,341 |
| | 100% | | 3/5 yr. | | 163,350 |
| (6) | 48.89 |
| | 4/12/2013 | - | 3/31/2027 |
Sunoco – Palm Beach Gardens, FL | | Sunoco, Inc. (R&M) | | 2,344 |
| | 100% | | 3/5 yr. | | 375,514 |
| (6) | 160.20 |
| | 4/12/2013 | - | 2/26/2029 |
Sunoco – Palm City, FL | | Sunoco, Inc. (R&M) | | 3,511 |
| | 100% | | 3/5 yr. | | 213,148 |
| (6) | 60.71 |
| | 4/12/2013 | - | 8/4/2031 |
Sunoco – Sebastian, FL | | Sunoco, Inc. (R&M) | | 3,391 |
| | 100% | | 3/5 yr. | | 222,667 |
| (6) | 65.66 |
| | 4/12/2013 | - | 4/30/2029 |
Sunoco – Titusville (Garden), FL | | Sunoco, Inc. (R&M) | | 3,389 |
| | 100% | | 3/5 yr. | | 272,659 |
| (6) | 80.45 |
| | 4/12/2013 | - | 8/18/2029 |
Sunoco – Titusville (Sisson), FL | | Sunoco, Inc. (R&M) | | 3,663 |
| | 80% | | 3/5 yr. | | 137,940 |
| (6) | 37.66 |
| | 4/12/2013 | - | 3/31/2027 |
Sunoco – West Palm Beach (Forest Hill), FL | | Sunoco, Inc. (R&M) | | 1,610 |
| | 100% | | 3/5 yr. | | 101,942 |
| (6) | 63.32 |
| | 4/12/2013 | - | 3/31/2027 |
Sunoco – West Palm Beach, FL | | Sunoco, Inc. (R&M) | | 2,894 |
| | 100% | | 3/5 yr. | | 108,900 |
| (6) | 37.63 |
| | 4/12/2013 | - | 3/31/2027 |
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | Effective | | | | |
| | | | Total | | % of Total | | | | Effective | | Base | | | | |
| | | | Square | | Rentable | | Renewal | | Annual | | Rent per | | | | |
| | Major | | Feet | | Square | | Options | | Base | | Square | | | | |
Property | | Tenants (1) | | Leased | | Feet | | (2) | | Rent (3) | | Foot (3) | | Lease Term (4) |
Waterford Park South – | | Ross Dress for | | 27,623 |
| | 30% | | 4/5 yr. | | $ | 255,513 |
| | $ | 9.25 |
| | 6/10/2014 | - | 1/31/2019 |
Clarksville, IN | | Less, Inc. | | | | | | | | 269,324 |
| | 9.75 |
| | 2/1/2019 | - | 1/31/2024 |
| | Michaels Stores, | | 21,811 |
| | 24% | | 4/5 yr. | | 208,579 |
| | 9.56 |
| | 4/12/2013 | - | 2/28/2015 |
| | Inc. | | | | | | | | 221,615 |
| | 10.16 |
| | 3/1/2015 | - | 2/29/2020 |
| | PetSmart, Inc. | | 20,087 |
| | 22% | | 6/5 yr. | | 271,175 |
| | 13.50 |
| | 4/12/2013 | - | 1/31/2017 |
| | | | | | | | | | 276,196 |
| | 13.75 |
| | 2/1/2017 | - | 1/31/2022 |
The Plant – San Jose, CA | | Home Depot, | | 141,021 |
| | 28% | | 1/10 yr. | | 3,384,504 |
| | 24.00 |
| | 4/15/2013 | - | 1/31/2014 |
| | U.S.A., Inc. | | | | | | & 2/5 yr. | | 3,807,567 |
| | 27.00 |
| | 2/1/2014 | - | 1/31/2019 |
| | | | | | | | | | 4,284,218 |
| | 30.38 |
| | 2/1/2019 | - | 1/31/2024 |
| | | | | | | | | | 4,820,098 |
| | 34.18 |
| | 2/1/2024 | - | 1/31/2029 |
| | | | | | | | | | 5,422,257 |
| | 38.45 |
| | 2/1/2029 | - | 1/31/2034 |
| | Toys “R” Us - | | 64,850 |
| | 13% | | 3/5 yr. | | 1,569,370 |
| | 24.20 |
| | 4/15/2013 | - | 1/31/2018 |
| | Delaware, Inc. | | | | | | | | 1,726,307 |
| | 26.62 |
| | 2/1/2018 | - | 1/31/2023 |
Natural Grocers – Lubbock, | | Vitamin Cottage | | 15,185 |
| | 100% | | 4/5 yr. | | 409,236 |
| | 26.95 |
| | 4/22/2013 | - | 3/31/2023 |
TX | | Natural Food Markets, Inc. | | | | | | | | 424,421 |
| | 27.95 |
| | 4/1/2023 | - | 7/31/2028 |
Kum & Go – Urbandale, IA | | Kum & Go, LC | | 4,962 |
| | 100% | | 4/5 yr. | | 187,500 |
| (7) | 37.79 |
| | 5/3/2013 | - | 12/22/2030 |
Kum & Go – Mount Vernon, MO | | Kum & Go, LC | | 4,950 |
| | 100% | | 4/5 yr. | | 193,750 |
| (7) | 39.14 |
| | 5/3/2013 | - | 12/22/2030 |
Kum & Go – Fairfield, IA | | Kum & Go, LC | | 5,008 |
| | 100% | | 4/5 yr. | | 186,250 |
| (7) | 37.19 |
| | 5/3/2013 | - | 10/31/2031 |
Kum & Go – Bentonville, AR | | Kum & Go, LC | | 5,027 |
| | 100% | | 4/5 yr. | | 218,400 |
| (7) | 43.45 |
| | 5/3/2013 | - | 3/31/2031 |
|
| | | |
| | | |
| | | |
(1) | | Major tenants include those tenants that occupy greater than 10% of the rentable square feet of the respective |
| | property. |
(2) | | Represents number of renewal options and the term of each option. |
(3) | | Effective annual base rent and effective base rent per square foot includes adjustments for rent concessions or |
| | abatements, if any. |
(4) | | Represents lease term beginning with the later of the purchase date or the rent commencement date through the |
| | end of the non-cancelable lease term, assuming no renewals are exercised. In general, these properties are subject |
| | to long-term triple or double net leases that require the tenants to pay substantially all operating expenses in |
| | addition to base rent. |
(5) | | Lease continues for 50 years following the end of the non-cancelable portion of the lease term, provided that the |
| | tenant has the right to terminate the lease as of the last day of any month during such 50-year period upon |
| | 12-months’ prior notice. |
(6) | | The annual base rent under the lease increases every three years by 10% of the then-current annual base rent. |
(7) | | The annual base rent under the lease increases every five years by 7.5% of the then-current annual base rent. |
Tenant Lease Expirations
The following table sets forth the aggregate lease expirations for each of our properties acquired as of May 3, 2013 for each of the next ten years and thereafter, assuming no renewal options are exercised. For purposes of the table, the Total Annual Base Rent Expiring column represents annualized rental revenue, on a straight line basis, for each lease that expires during the respective year.
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| | | | | | | | | | | | |
| | Number of | | Square | | Total Annual | | % of Total |
Year Ending December 31, | | Leases Expiring | | Feet Expiring | | Base Rent Expiring | | Annual Base Rent |
2013 | | 6 | | 22,211 |
| | $ | 475,335 |
| | 1 | % |
2014 | | 14 | | 37,391 |
| | 950,934 |
| | 1 | % |
2015 | | 14 | | 35,110 |
| | 736,680 |
| | 1 | % |
2016 | | 15 | | 30,493 |
| | 751,337 |
| | 1 | % |
2017 | | 18 | | 96,607 |
| | 2,735,049 |
| | 4 | % |
2018 | | 22 | | 116,922 |
| | 3,721,512 |
| | 5 | % |
2019 | | 14 | | 130,338 |
| | 2,734,859 |
| | 4 | % |
2020 | | 13 | | 248,449 |
| | 3,884,225 |
| | 5 | % |
2021 | | 16 | | 56,782 |
| | 1,820,437 |
| | 2 | % |
2022 | | 20 | | 367,533 |
| | 4,996,551 |
| | 7 | % |
2023 | | 24 | | 529,952 |
| | 8,394,338 |
| | 11 | % |
Thereafter | | 123 | | 2,437,224 |
| | 43,480,590 |
| | 58 | % |
| | 299 | | 4,109,012 |
| | $ | 74,681,847 |
| | 100 | % |
| | | | | | | | |
| | | | | | | | |
Depreciable Tax Basis
For federal income tax purposes, the aggregate depreciable basis in the 20 recently-acquired properties described in this prospectus supplement is approximately $221.2 million. When we calculate depreciation expense for federal income tax purposes, we depreciate buildings and improvements over a 40-year recovery period, land improvements over a 20-year recovery period and furnishings and equipment over a 12-year recovery period using a straight-line method and a mid-month convention. The preliminary depreciable basis in these 20 properties is estimated, as of May 3, 2013, as follows:
|
| | | | |
Wholly–owned Property | | Depreciable Tax Basis |
Tractor Supply – Stuttgart, AR | | $ | 2,284,286 |
|
Walgreens – Birmingham, AL | | 5,833,214 |
|
Dollar General – Alliance, NE | | 826,804 |
|
Sunoco – Cocoa, FL | | 1,518,266 |
|
Sunoco – Lake Worth, FL | | 2,436,751 |
|
Sunoco – Merritt Island, FL | | 1,738,510 |
|
Sunoco – Palm Beach Gardens, FL | | 3,972,343 |
|
Sunoco – Palm City, FL | | 2,410,780 |
|
Sunoco – Sebastian, FL | | 2,484,179 |
|
Sunoco – Titusville (Garden), FL | | 3,041,915 |
|
Sunoco – Titusville (Sisson), FL | | 1,518,266 |
|
Sunoco – West Palm Beach (Forest Hill), FL | | 1,196,302 |
|
Sunoco – West Palm Beach, FL | | 1,120,393 |
|
Waterford Park South – Clarksville, IN | | 10,988,000 |
|
The Plant – San Jose, CA | | 166,542,000 |
|
Natural Grocers – Lubbock, TX | | 4,305,000 |
|
Kum & Go – Urbandale, IA | | 2,151,680 |
|
Kum & Go – Mount Vernon, MO | | 2,223,020 |
|
Kum & Go – Fairfield, IA | | 2,137,740 |
|
Kum & Go – Bentonville, AR | | 2,504,280 |
|
| | $ | 221,233,729 |
|
We currently have no plan for any renovations, improvements or development of the properties listed above, and we believe all of our properties are adequately insured. We intend to obtain adequate insurance coverage for all future properties that we acquire.
Placement of Debt on Certain Real Property Investments
Bridge Facility
As described in the prospectus, CCPT IV OP entered into a first modification and lender joinder agreement (the Modified Bridge Credit Agreement) with JPMorgan Chase and Bank of America, N.A., which modified the Bridge Credit Agreement. The Modified Bridge Credit Agreement increased the allowable borrowings up to $150.0 million and added Bank of America, N.A. as a party to the Bridge Credit Agreement.
On May 3, 2013, CCPT IV OP entered into a second modification agreement (the Second Modification Agreement) with JPMorgan Chase and Bank of America, N.A., which amended the Modified Bridge Credit Agreement by increasing the allowable borrowings up to $250.0 million and extending the maturity date to September 14, 2013.
The Second Modification Agreement contains customary representations, warranties and borrowing conditions. CCPT IV OP paid certain fees under the Second Modification Agreement, including an up-front fee. Other than the modified terms described above, the material terms of the Bridge Facility, as modified by the Modified Bridge Credit Agreement, remain unchanged. As of May 3, 2013, CCPT IV OP had approximately $91.5 million outstanding under the Bridge Facility and, based on the underlying collateral pool for qualified unencumbered properties, approximately $3.1 million available for borrowing.
Potential Real Property Investments
Our advisor has identified certain properties as potential suitable investments for us. The acquisition of each such property is subject to a number of conditions. A significant condition to acquiring any one of these properties is our ability to raise sufficient proceeds in this offering to pay all or a portion of the purchase price, including any expenses or closing costs in connection with closing the acquisitions. An additional condition to acquiring these properties may be securing debt financing to pay the balance of the purchase price. Such financing may not be available on acceptable terms or at all.
Other properties may be identified in the future that we may acquire prior to or instead of these properties. Due to the considerable conditions that must be satisfied in order to acquire these properties, we cannot make any assurances that the closing of these acquisitions is probable. The properties currently identified are listed below.
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| | | | | | | | | | | | | |
| | | | | | Approximate |
| | Expected | | Approximate | | Fees to be Paid |
Property | | Acquisition Date | | Purchase Price | | to Sponsor (1) |
Academy Sports – Valdosta, GA | | May 2013 | | $ | 9,790,000 |
| | $ | 195,800 |
|
Walgreens – Kannapolis, NC | | May 2013 | | 7,741,935 |
| | 154,839 |
|
Home Depot – Plainwell, MI | | May 2013 | | 13,389,430 |
| | 267,789 |
|
LA Fitness – Mesa, AZ | | May 2013 | | 11,100,000 |
| | 222,000 |
|
Dollar General/General Market – Various (2) | | May 2013 | | 5,238,432 |
| | 104,769 |
|
Summerfield Crossing – Riverview, FL | | May 2013 | | 13,900,000 |
| | 278,000 |
|
Hancock Village – Chesterfield, VA | | May 2013 | | 28,500,000 |
| | 570,000 |
|
Fargo Plaza – Fargo, ND | | May 2013 | | 6,980,219 |
| | 139,604 |
|
Warrenton Highlands – Warrenton, OR | | May 2013 | | 8,650,000 |
| | 173,000 |
|
| | | | $ | 105,290,016 |
| | $ | 2,105,801 |
|
| | | |
| | | |
(1) | | Approximate fees to be paid to sponsor upon closing represent amounts payable to an affiliate of our advisor for acquisition fees in connection with the property acquisition. |
(2) | | The Dollar General/General Market portfolio consists of four single-tenant properties located in North Carolina, |
| | Alabama and Georgia. |
The potential property acquisitions are subject to net leases, pursuant to which a tenant is generally required to pay substantially all operating expenses in addition to base rent.
|
| | | | | | | | | | | | | |
| | | | | Number of | | | | Rentable | | Physical |
Property | | Tenants | | Tenant(s) | | Square Feet | | Occupancy |
Academy Sports – Valdosta, GA | | 1 | | New Academy Finance Company LLC | | 71,690 |
| | 100% |
Walgreens – Kannapolis, NC | | 1 | | Walgreen Co. | | 13,650 |
| | 100% |
Home Depot – Plainwell, MI | | 1 | | Home Depot USA, Inc. | | 96,801 |
| | 100% |
LA Fitness – Mesa, AZ | | 1 | | LA Fitness International, LLC | | 57,500 |
| | 100% |
Dollar General/General Market – Various (1) | | 4 | | Dolgencorp, LLC | | 36,178 |
| | 100% |
Summerfield Crossing – Riverview, FL | | 3 | | Various | | 113,500 |
| | 100% |
Hancock Village – Chesterfield, VA | | 25 | | Various | | 153,854 |
| | 100% |
Fargo Plaza – Fargo, ND | | 3 | | Various | | 93,143 |
| | 97% |
Warrenton Highlands – Warrenton, OR | | 6 | | Various | | 44,504 |
| | 96% |
| | | | | | | | | 680,820 |
| | | |
|
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
(1) | | The Dollar General/General Market portfolio consists of four single-tenant properties located in North Carolina, |
| | Alabama and Georgia. |
The table below provides leasing information for the major tenants at each potential property:
|
| | | | | | | | | | | | | | | | |
| | | | | | Effective | | Effective | | | | |
| | | | Renewal | | Annual | | Base Rent | | | | |
| | | | Options | | Base | | per Square | | | | |
Property | | Major Tenants (1) | | (2) | | Rent (3) | | Foot (3) | | Lease Term (4) |
Academy Sports – Valdosta, GA | | New Academy Finance | | 3/5 yr. | | $ | 734,823 |
| | $ | 10.25 |
| | 9/28/2012 | - | 1/31/2018 |
| | Company LLC | | | | 770,829 |
| | 10.75 |
| | 2/1/2018 | - | 1/31/2023 |
| | | | | | 807,058 |
| | 11.26 |
| | 2/1/2023 | - | 1/31/2028 |
Walgreens – Kannapolis, NC | | Walgreen Co. | | 10/5 yr. | | 480,000 |
| | 35.16 |
| | 10/1/2012 | - | 9/30/2032 |
Home Depot – Plainwell, MI | | Home Depot USA, Inc. | | 4/5 yr. | | 823,450 |
| (5) | 8.51 |
| | 2/1/2022 | - | 1/31/2026 |
LA Fitness – Mesa, AZ | | LA Fitness International, LLC | | 3/5 yr. | | 862,500 |
| (6) | 15.00 |
| | 1/27/2011 | - | 1/31/2026 |
Dollar General – Various | | Dolgencorp, LLC | | 5/5 yr. | | 369,580 |
| | 10.22 |
| | 12/1/2012 | - | 11/30/2027 |
Summerfield Crossing – Riverview, | | Bealls Department | | 5/5 yr. | | 760,000 |
| | 9.50 |
| | 4/1/2013 | - | 4/30/2014 |
FL | | Store, Inc. | | | | 800,000 |
| | 10.00 |
| | 5/1/2014 | - | 4/30/2019 |
| | | | | | 840,000 |
| | 10.50 |
| | 5/1/2019 | - | 4/30/2024 |
| | Marshalls of MA, Inc. | | 4/5 yr. | | 210,000 |
| | 8.75 |
| | 4/1/2013 | - | 1/31/2024 |
Hancock Village – Chesterfield, VA | | Hobby Lobby Stores, | | 3/5 yr. | | 420,375 |
| | 7.50 |
| | 10/1/2011 | - | 10/31/2016 |
| | Inc. | | | | 448,400 |
| | 8.00 |
| | 11/1/2016 | - | 10/31/2021 |
| | | | | | 476,425 |
| | 8.50 |
| | 11/1/2021 | - | 10/31/2026 |
| | Dicks Sporting Goods, | | 4/5 yr. | | 500,290 |
| | 10.00 |
| | 10/1/2011 | - | 1/31/2017 |
| | Inc. | | | | 525,305 |
| | 10.50 |
| | 2/1/2017 | - | 1/31/2022 |
Fargo Plaza – Fargo, ND | | Hobby Lobby Stores, Inc. | | 2/5 yr. | | 375,000 |
| | 6.25 |
| | 9/1/2003 | - | 8/31/2023 |
| | Dollar Tree Stores, Inc. | | 2/5 yr. | | 95,756 |
| | 5.92 |
| | 10/1/2005 | - | 9/30/2015 |
| | Kirkland’s Stores, Inc. | | 2/5 yr. | | 111,213 |
| | 7.75 |
| | 1/1/2013 | - | 1/31/2018 |
| | | | | | 122,334 |
| | 8.53 |
| | 2/1/2018 | - | 1/31/2023 |
Warrenton Highlands – Warrenton, OR | | Staples the Office Superstore, LLC | | 3/5 yr. | | 215,835 |
| | 15.00 |
| | 12/1/2010 | - | 1/31/2021 |
| | Petco Animal Supplies Stores, Inc. | | 4/5 yr. | | 146,875 |
| | 12.50 |
| | 11/26/2011 | - | 1/31/2022 |
| | Dollar Tree Stores, Inc. | | 3/5 yr. | | 126,000 |
| | 14.00 |
| | 1/1/2010 | - | 3/31/2021 |
|
| | | |
| | | |
| | | |
(1) | | Major tenants include those tenants that occupy greater than 10% of the rentable square feet of the property. |
(2) | | Represents number of renewal options and the term of each option. |
(3) | | Effective annual base rent and effective base rent per square foot include adjustments for rent concessions or abatements, if any. |
(4) | | Represents lease term beginning with the current rent period through the end of the non-cancelable lease term, assuming no renewals are exercised. |
(5) | | The annual base rent under the lease increases annually by 2% of the then-current annual base rent. |
(6) | | The annual base rent under the lease increases every five years by the lesser of the cumulative percentage increase in the Consumer Price Index over the preceding five-year period or 10% of the then-current annual base rent. |
We expect to purchase the properties with proceeds from our ongoing offering of our common stock and available debt proceeds from our $250.0 million Credit Facility and $250.0 million Bridge Facility. We may use the properties as collateral in future financings.
CCPT 4-SUP-02B