Filed Pursuant to Rule 424(b)(3)
Registration No. 333-169533
COLE CREDIT PROPERTY TRUST IV, INC.
SUPPLEMENT NO. 5 DATED JUNE 11, 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, Supplement No. 1 dated May 1, 2013, Supplement No. 2 dated May 9, 2013, Supplement No. 3 dated May 17, 2013 and Supplement No. 4 dated June 3, 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.; and |
(2) | | recent 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 June 7, 2013, we had accepted investors’ subscriptions for, and issued, approximately 62.2 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 $620.1 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 June 3, 2013, our investment portfolio consisted of 158 properties located in 32 states, consisting of approximately 4.9 million gross rentable square feet of commercial space, including the square feet of buildings that are on land subject to ground leases. We acquired 17 properties between May 4, 2013 and June 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 |
LA Fitness – Mesa, AZ | | Fitness | | 1 | | L.A. Fitness International, LLC | | 57,500 |
| | $ | 11,100,000 |
|
Academy Sports – Valdosta, GA | | Sports and Hobby | | 1 | | Academy, LTD | | 71,680 |
| | 9,790,000 |
|
Dollar General – Theodore, AL | | Discount Store | | 1 | | Dolgencorp, LLC | | 9,026 |
| | 1,233,451 |
|
Dollar General – Temple, GA | | Discount Store | | 1 | | Dolgencorp, LLC | | 9,026 |
| | 1,354,297 |
|
Home Depot – Plainwell, MI | | Home and Garden | | 1 | | Home Depot U.S.A, Inc. | | 96,801 |
| | 13,389,430 |
|
TJ Maxx/Dollar Tree – Oxford, OH | | Discount Store | | 2 | | The TJX Companies, Inc./Dollar Tree Stores, Inc. | | 37,401 |
| | 3,707,044 |
|
Hancock Village – Chesterfield, VA | | Shopping Center | | 25 | | Various | | 163,875 |
| | 27,500,000 |
|
|
| | | | | | | | | | | | | |
| | | | | | | | Rentable | | |
| | | | Number of | | | | Square | | Purchase |
Property Description | | Type | | Tenants | | Tenant(s) | | Feet (1) | | Price |
Poplar Springs Plaza – Duncan, SC | | Shopping Center | | 9 | | Various | | 64,038 |
| | $ | 7,900,000 |
|
Tractor Supply – Lumberton, NC | | Home and Garden | | 1 | | The Tractor Supply Company | | 19,097 |
| | 3,121,429 |
|
Warrenton Highlands – Warrenton, OR | | Shopping Center | | 6 | | Various | | 44,504 |
| | 8,650,000 |
|
Fargo Plaza – Fargo, ND | | Shopping Center | | 3 | | Various | | 90,525 |
| | 6,855,219 |
|
Quick Chek – Various (2) | | Convenience Store | | 6 | | Quick Chek Corporation | | 42,209 |
| | 44,000,001 |
|
| | | | | | | | 705,682 |
| | $ | 138,600,871 |
|
|
| | | |
| | | |
(1) | | Includes square feet of buildings that are on land subject to ground leases. |
(2) | | The Quick Chek portfolio consists of six single-tenant properties, all of which are located in New York. |
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 June 3, 2013, we, through separate wholly–owned limited liability companies and limited partnerships, owned 158 properties located in 32 states, consisting of approximately 4.9 million gross rentable square feet of commercial space, including the square feet of buildings that are on land subject to ground leases. The properties generally were acquired through the use of proceeds from our initial public offering and from available borrowings. We acquired 17 properties between May 4, 2013 and June 3, 2013, which are listed below in order of their date of acquisition.
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | Year | | Purchase | | Fees Paid to | | Initial | | Average | | Physical |
Property Description | | Date Acquired | | Built | | Price | | Sponsor (1) | | Yield (2) | | Yield (3) | | Occupancy |
LA Fitness – Mesa, AZ | | May 8, 2013 | | 2010 | | $ | 11,100,000 |
| | $ | 222,000 |
| | 7.77 | % | | 7.77 | % | | 100 | % |
Academy Sports – Valdosta, GA | | May 10, 2013 | | 2012 | | 9,790,000 |
| | 195,800 |
| | 7.51 | % | | 7.93 | % | | 100 | % |
Dollar General – Theodore, AL | | May 15, 2013 | | 2013 | | 1,233,451 |
| | 24,669 |
| | 7.40 | % | | 7.40 | % | | 100 | % |
Dollar General – Temple, GA | | May 15, 2013 | | 2013 | | 1,354,297 |
| | 27,086 |
| | 7.40 | % | | 7.47 | % | | 100 | % |
Home Depot – Plainwell, MI | | May 16, 2013 | | N/A (4) | | 13,389,430 |
| | 267,789 |
| | 6.15 | % | | 6.96 | % | | 100 | % |
TJ Maxx/Dollar Tree – Oxford, OH | | May 20, 2013 | | 2013 | | 3,707,044 |
| | 74,141 |
| | 7.80 | % | | 7.98 | % | | 100 | % |
Hancock Village – Chesterfield, VA | | May 23, 2013 | | 2009 | | 27,500,000 |
| | 550,000 |
| | 8.71 | % | | 9.38 | % | | 100 | % |
Poplar Springs Plaza – Duncan, SC | | May 24, 2013 | | 1995 | | 7,900,000 |
| | 158,000 |
| | 7.33 | % | | 7.35 | % | | 95 | % |
Tractor Supply – Lumberton, NC | | May 24, 2013 | | 2013 | | 3,121,429 |
| | 62,429 |
| | 7.00 | % | | 7.36 | % | | 100 | % |
Warrenton Highlands – Warrenton, OR | | May 29, 2013 | | 2011 | | 8,650,000 |
| | 173,000 |
| | 7.31 | % | | 7.39 | % | | 96 | % |
Fargo Plaza – Fargo, ND | | May 30, 2013 | | 2003 | | 6,855,219 |
| | 137,104 |
| | 8.27 | % | | 8.56 | % | | 97 | % |
Quick Chek – Middletown (Route 211), NY | | May 31, 2013 | | 2007 | | 6,735,369 |
| | 134,707 |
| | 6.55 | % | | 7.20 | % | | 100 | % |
Quick Chek – Middletown (HWY 108), NY | | May 31, 2013 | | 2009 | | 7,826,972 |
| | 156,539 |
| | 6.55 | % | | 7.15 | % | | 100 | % |
Quick Chek – Middletown (Main), NY | | May 31, 2013 | | 2009 | | 8,040,713 |
| | 160,814 |
| | 6.55 | % | | 7.14 | % | | 100 | % |
Quick Chek – Kingston, NY | | May 31, 2013 | | 2008 | | 7,330,789 |
| | 146,616 |
| | 6.55 | % | | 7.20 | % | | 100 | % |
Quick Chek – Saugerties, NY | | May 31, 2013 | | 2009 | | 7,330,789 |
| | 146,616 |
| | 6.55 | % | | 7.18 | % | | 100 | % |
Quick Chek – Lake Katrine, NY | | May 31, 2013 | | 2008 | | 6,735,369 |
| | 134,707 |
| | 6.55 | % | | 7.22 | % | | 100 | % |
| | | | | | $ | 138,600,871 |
| | $ | 2,772,017 |
| | | | | | |
|
| | | |
| | | |
(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) | | Subject to ground lease and therefore year built is not applicable. |
The following table sets forth the principal provisions of the lease term for the major tenants at each of the properties listed above:
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | 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) |
LA Fitness – Mesa, AZ | | L.A. Fitness International, LLC | | 57,500 |
| | 100% | | 3/5 yr. | | $ | 862,500 |
| (5) | $ | 15.00 |
| | 5/8/2013 | - | 1/31/2026 |
Academy Sports – Valdosta, | | Academy, LTD | | 71,680 |
| | 100% | | 3/5 yr. | | 734,823 |
| | 10.25 |
| | 5/10/2013 | - | 1/31/2017 |
GA | | | | | | | | | | 770,560 |
| | 10.75 |
| | 2/1/2017 | - | 1/31/2022 |
| | | | | | | | | | 806,400 |
| | 11.25 |
| | 2/1/2022 | - | 1/31/2028 |
Dollar General – Theodore, AL | | Dolgencorp, LLC | | 9,026 |
| | 100% | | 5/5 yr. | | 91,275 |
| | 10.11 |
| | 5/15/2013 | - | 4/30/2028 |
Dollar General – Temple, GA | | Dolgencorp, LLC | | 9,026 |
| | 100% | | 5/5 yr. | | 100,218 |
| | 11.10 |
| | 5/15/2013 | - | 3/31/2023 |
| | | | | | | | | | 103,225 |
| | 11.44 |
| | 4/1/2023 | - | 3/31/2028 |
Home Depot – Plainwell, MI | | Home Depot U.S.A, Inc. | | — |
| (6) | 100% | | 4/5 yr. | | 823,450 |
| (7) | 8.51 |
| | 5/16/2013 | - | 1/31/2026 |
TJ Maxx/Dollar Tree – | | The TJX | | 27,218 |
| | 73% | | 4/5 yr. | | 197,331 |
| | 7.25 |
| | 5/20/2013 | - | 4/30/2018 |
Oxford, OH | | Companies, Inc. | | | | | | | | 210,940 |
| | 7.75 |
| | 5/1/2018 | - | 4/30/2023 |
| | Dollar Tree Stores, Inc. | | 10,183 |
| | 27% | | 3/5 yr. | | 91,647 |
| | 9.00 |
| | 5/20/2013 | - | 8/31/2017 |
Hancock Village – | | Dick’s Sporting | | 50,029 |
| | 31% | | 4/5 yr. | | 500,290 |
| | 10.00 |
| | 5/23/2013 | - | 1/31/2017 |
Chesterfield, VA | | Goods, Inc. | | | | | | | | 525,305 |
| | 10.50 |
| | 2/1/2017 | - | 1/31/2022 |
| | Hobby Lobby | | 56,050 |
| | 34% | | 3/5 yr. | | 420,375 |
| | 7.50 |
| | 5/23/2013 | - | 10/31/2016 |
| | Stores, Inc. | | | | | | | | 448,400 |
| | 8.00 |
| | 11/1/2016 | - | 10/31/2021 |
| | | | | | | | | | 476,425 |
| | 8.50 |
| | 11/1/2021 | - | 10/31/2026 |
Poplar Springs Plaza – Duncan, SC | | Publix Super Markets, Inc. | | 47,955 |
| | 75% | | 6/5 yr. | | 395,629 |
| | 8.25 |
| | 5/24/2013 | - | 11/1/2022 |
Tractor Supply – Lumberton, | | The Tractor | | 19,097 |
| | 100% | | 4/5 yr. | | 218,500 |
| | 11.44 |
| | 5/24/2013 | - | 3/31/2018 |
NC | | Supply | | | | | | | | 229,425 |
| | 12.01 |
| | 4/1/2018 | - | 3/31/2023 |
| | Company | | | | | | | | 240,896 |
| | 12.61 |
| | 4/1/2023 | - | 3/31/2028 |
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | 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) |
Warrenton Highlands – Warrenton, OR | | Staples The Office Superstore, LLC | | 14,389 |
| | 32% | | 3/5 yr. | | $ | 215,835 |
| | $ | 15.00 |
| | 5/29/2013 | - | 1/31/2021 |
| | Petco Animal Supplies Stores, Inc. | | 11,750 |
| | 26% | | 4/5 yr. | | 146,875 |
| | 12.50 |
| | 5/29/2013 | - | 1/31/2022 |
| | Dollar Tree Stores, Inc. | | 9,000 |
| | 20% | | 3/5 yr. | | 126,000 |
| | 14.00 |
| | 5/29/2013 | - | 3/31/2021 |
Fargo Plaza – Fargo, ND | | Hobby Lobby Stores, Inc. | | 60,000 |
| | 66% | | 2/5 yr. | | 360,000 |
| | 6.00 |
| | 5/30/2013 | - | 8/31/2023 |
| | Dollar Tree Stores, Inc. | | 16,175 |
| | 18% | | 2/5 yr. | | 95,756 |
| | 5.92 |
| | 5/30/2013 | - | 9/30/2015 |
| | Kirkland’s Stores, | | 14,350 |
| | 16% | | 2/5 yr. | | 111,213 |
| | 7.75 |
| | 5/30/2013 | - | 6/30/2018 |
| | Inc. | | | | | | | | 122,406 |
| | 8.53 |
| | 7/1/2018 | - | 6/30/2023 |
Quick Chek – Middletown | | Quick Chek | | 7,195 |
| | 100% | | 4/5 yr. | | 441,000 |
| | 61.29 |
| | 5/31/2013 | - | 11/30/2018 |
(Route 211), NY | | Corporation | | | | | | | | 485,100 |
| | 67.42 |
| | 12/1/2018 | - | 11/30/2023 |
| | | | | | | | | | 533,610 |
| | 74.16 |
| | 12/1/2023 | - | 11/30/2028 |
Quick Chek – Middletown | | Quick Chek | | 6,345 |
| | 100% | | 4/5 yr. | | 512,500 |
| | 80.77 |
| | 5/31/2013 | - | 9/21/2019 |
(HWY 108), NY | | Corporation | | | | | | | | 563,750 |
| | 88.85 |
| | 9/22/2019 | - | 9/21/2024 |
| | | | | | | | | | 620,125 |
| | 97.73 |
| | 9/22/2024 | - | 9/21/2029 |
Quick Chek – Middletown | | Quick Chek | | 7,009 |
| | 100% | | 4/5 yr. | | 526,500 |
| | 75.12 |
| | 5/31/2013 | - | 8/31/2020 |
(Main), NY | | Corporation | | | | | | | | 579,150 |
| | 82.63 |
| | 9/1/2020 | - | 8/31/2025 |
| | | | | | | | | | 637,065 |
| | 90.89 |
| | 9/1/2025 | - | 8/31/2030 |
Quick Chek – Kingston, NY | | Quick Chek | | 7,184 |
| | 100% | | 4/5 yr. | | 480,000 |
| | 66.82 |
| | 5/31/2013 | - | 12/31/2018 |
| | Corporation | | | | | | | | 528,000 |
| | 73.50 |
| | 1/1/2019 | - | 12/31/2023 |
| | | | | | | | | | 580,800 |
| | 80.85 |
| | 1/1/2024 | - | 12/31/2028 |
Quick Chek – Saugerties, NY | | Quick Chek | | 7,216 |
| | 100% | | 4/5 yr. | | 480,000 |
| | 66.52 |
| | 5/31/2013 | - | 5/28/2019 |
| | Corporation | | | | | | | | 528,000 |
| | 73.17 |
| | 5/29/2019 | - | 5/28/2024 |
| | | | | | | | | | 580,800 |
| | 80.49 |
| | 5/29/2024 | - | 5/28/2029 |
Quick Chek – Lake Katrine, | | Quick Chek | | 7,260 |
| | 100% | | 4/5 yr. | | 441,000 |
| | 60.74 |
| | 5/31/2013 | - | 5/21/2018 |
NY | | Corporation | | | | | | | | 485,100 |
| | 66.82 |
| | 5/22/2018 | - | 5/21/2023 |
| | | | | | | | | | 533,610 |
| | 73.50 |
| | 5/22/2023 | - | 5/21/2028 |
|
| | | |
| | | |
| | | |
(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) | | 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. |
(6) | | Subject to a ground lease. |
(7) | | The annual base rent under the lease increases every year by 2% 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 June 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.
|
| | | | | | | | | | | | |
| | Number of | | Square | | Total Annual | | % of Total |
Year Ending December 31, | | Leases Expiring | | Feet Expiring | | Base Rent Expiring | | Annual Base Rent |
2013 | | 8 | | 27,196 |
| | $ | 536,413 |
| | 1 | % |
2014 | | 15 | | 38,529 |
| | 970,600 |
| | 1 | % |
2015 | | 20 | | 57,825 |
| | 988,249 |
| | 1 | % |
2016 | | 18 | | 35,015 |
| | 862,019 |
| | 1 | % |
2017 | | 20 | | 107,990 |
| | 2,863,560 |
| | 3 | % |
2018 | | 26 | | 122,941 |
| | 3,860,054 |
| | 5 | % |
2019 | | 16 | | 137,965 |
| | 2,954,979 |
| | 3 | % |
2020 | | 21 | | 267,427 |
| | 4,404,802 |
| | 5 | % |
2021 | | 20 | | 83,471 |
| | 2,250,698 |
| | 3 | % |
2022 | | 27 | | 491,949 |
| | 6,420,031 |
| | 7 | % |
2023 | | 28 | | 634,520 |
| | 9,150,639 |
| | 11 | % |
Thereafter | | 137 | | 2,802,981 |
| | 50,232,571 |
| | 59 | % |
| | 356 | | 4,807,809 |
| | $ | 85,494,615 |
| | 100 | % |
| | | | | | | | |
| | | | | | | | |
Depreciable Tax Basis
For federal income tax purposes, the aggregate depreciable basis in the 17 recently-acquired properties described in this prospectus supplement is approximately $101.1 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 17 properties is estimated, as of June 3, 2013, as follows:
|
| | | | | |
Wholly–owned Property | | Depreciable Tax Basis | |
LA Fitness – Mesa, AZ | | $ | 9,102,000 |
| |
Academy Sports – Valdosta, GA | | 8,027,800 |
| |
Dollar General – Theodore, AL | | 1,011,430 |
| |
Dollar General – Temple, GA | | 1,110,524 |
| |
Home Depot – Plainwell, MI | | — |
| (1) |
TJ Maxx/Dollar Tree – Oxford, OH | | 3,039,776 |
| |
Hancock Village – Chesterfield, VA | | 21,021,740 |
| (1) |
Poplar Springs Plaza – Duncan, SC | | 6,478,000 |
| |
Tractor Supply – Lumberton, NC | | 2,559,572 |
| |
Warrenton Highlands – Warrenton, OR | | 7,093,000 |
| |
Fargo Plaza – Fargo, ND | | 5,621,280 |
| |
Quick Chek – Middletown (Route 211), NY | | 5,523,003 |
| |
Quick Chek – Middletown (HWY 108), NY | | 6,418,117 |
| |
Quick Chek – Middletown (Main), NY | | 6,593,385 |
| |
Quick Chek – Kingston, NY | | 6,011,247 |
| |
Quick Chek – Saugerties, NY | | 5,523,003 |
| |
Quick Chek – Lake Katrine, NY | | 6,011,247 |
| |
| | $ | 101,145,124 |
| |
|
| | | |
| | | |
(1) | | Depreciable basis excludes any ground leases. |
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.
CCPT 4-SUP-05B