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Cole Credit's All-Cash Strategy Gives Market Edge

Given the current environment, where there's a lack of liquidity in the marketplace, we're in a good situation.'

By Michelle Napoli | Updated on July 02, 2009

PHOENIX—Cole Credit Property Trust III Inc., a non-traded REIT affiliate of locally based Cole Real Estate Investments, is finding its ability to purchase properties all-cash is giving it a competitive edge. During the month of June, it closed on sale-leasebacks with Aaron Rents Inc. and Academy Sports entities totaling $45.33 million and Wednesday it closed on another sizeable sale-leaseback with Cracker Barrel Old Country Store Inc., among other deals currently in its pipeline.

“Given the current environment, where there’s a lack of liquidity in the marketplace, we’re in a good situation. There are not a lot of all-cash buyers currently in the market,” Cole chief marketing officer John Towle tells GlobeSt.com. “This provides us with more negotiation room.” In addition, because of the capital constrained environment, the REIT’s investors benefit from being able to buy properties at “historically discounted prices,” Towle adds.

According to a June 29 filing with the Securities and Exchange Commission, the REIT, CCPT III, paid $10.93 million for a portfolio of eight Aaron Rents retail properties totaling 103,041 square feet. They were leased back under a 15-year master lease agreement, plus four five-year renewal options. Initial annual base rent is slightly more than $909,000, with 10% increases every five years.

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