Item 1.01 Entry into a Material Definitive Agreement.
OnDecember 29, 2022 (the "Effective Date"), certain subsidiaries (collectively, the "Seller") ofCIM Real Estate Finance Trust, Inc. (the "Company") entered into an Agreement of Purchase and Sale (the "Purchase and Sale Agreement") with certain subsidiaries of Realty Income Corporation (NYSE: O) (the "Purchaser"), to sell to the Purchaser 185 single-tenant net lease properties, for which the Seller will receive, in the aggregate, approximately$894 million in total consideration at closing. The consideration will be paid in cash, and the Company anticipates closing the transaction during the first quarter of 2023. However, the transaction remains subject to significant conditions to closing, and the Company can give no assurance that the closing will occur within this timeframe, or at all. The material terms of the Purchase and Sale Agreement include: (i) a deposit from the Purchaser of$20 million due within three business days after the Effective Date, which shall be non-refundable to the Purchaser (except as otherwise provided in the Purchase and Sale Agreement) after the expiration of the due diligence period ending onFebruary 17, 2023 (the "Due Diligence Period"), which begins on the Effective Date and may be extended for select circumstances as outlined in the Purchase and Sale Agreement; (ii) the Purchaser's right to terminate the Purchase and Sale Agreement by delivering written notice to the Seller for any reason or no reason at any time before the expiration of the Due Diligence Period, in which event the deposit shall be returned to the Purchaser; (iii) an initial closing date within 15 days following the expiration of the Due Diligence Period; (iv) limited rights to exclude one or more properties from the sale as a result of certain diligence-related findings or circumstances detailed in the Purchase and Sale Agreement; and (v) certain rights to delay the closing of one or more properties if reasonably needed to satisfy other specific requirements that may be determined to be applicable to such properties. The Company is joining the Purchase and Sale Agreement for the limited purpose of providing credit support for certain obligations of the Seller as further detailed in the Purchase and Sale Agreement. The Purchase and Sale Agreement also contains additional covenants, representations and warranties, indemnifications, and other provisions that are customary for real estate purchase and sale agreements. Following the final closing of the transaction, the Company's remaining net lease portfolio is expected to consist of 199 properties encompassing approximately 6.4 million gross rentable square feet of commercial space. Those assets are 99.7% leased with a weighted average lease term of 11.5 years. The remaining net lease portfolio is primarily financed with a long-term, fixed rate asset-backed securitization.
The proceeds from the transaction, net of the repayment of debt and other transaction costs, will be redeployed in accordance with the Company's investment strategy, with an immediate focus on secured loans and other similar credit investments.
The foregoing summary description of the Purchase and Sale Agreement is not complete and is qualified in its entirety by the actual terms of the Purchase and Sale Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference herein. Item 7.01 Regulation FD Disclosure.
Attached to this Form 8-K as Exhibit 99.1 is a press release issued on
The information in this Item 7.01, including Exhibit 99.1, is being furnished pursuant to Item 7.01 of Form 8-K and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended. Item 9.01 Financial Statements and Exhibits. (d) Exhibits Exhibit No. Description 10.1 Agreement of Purchase and Sale, dated as of
2022 , by and between certain indirect
subsidiaries of
Finance Trust, Inc. and certain subsidiaries
of Realty Income
Corporation. 99.1 Press Release issued December 30 , 2022
related to the Purchase and
Sale Agreement. 104 Cover Page Interactive Data File (embedded within
the Inline XBRL document).
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