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American Finance Trust to Buy $1.3 Billion Shopping Portfolio

The REIT will purchase 81 outdoor shopping centers spanning 9.5 million sq. ft. from subsidiaries of CIM Real Estate Finance Trust.

(Bloomberg)—American Finance Trust Inc. is buying a portfolio of U.S. retail centers from subsidiaries of CIM Real Estate Finance Trust for $1.3 billion, expanding its focus on necessity-based shopping.

The New York-based real estate investment trust will purchase 81 outdoor shopping centers anchored with major retail tenants and grocery centers, according to a statement Monday. The deal, which encompasses properties spanning 9.5 million square feet (883,000 square meters), is expected to close in the first quarter.

American Finance plans to fund the transaction by a combination of selling three office buildings leased to Sanofi for $261 million, cash, debt and $53 million of equity issuance to the sellers.

“We’ve been big believers in the strength of retail in the United States,” Michael Weil, the REIT’s chief executive officer, said in a telephone interview. “Brick and mortar has really become last mile, and has held up really well in the last two-year period of the pandemic, and we continue to see the industry strengthening.”

Upon closing, American Finance will own more than 1,000 properties spanning 29 million square feet, and it plans to rename itself “The Necessity Retail REIT.” Its largest share of tenants are expected to be from discount retail, gas stations and convenience centers, and specialty stores.

“Well over 40% of the straight-line rent is coming from the Sun Belt markets, which we continue to see as high-growth, high-population,” Weil said.

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