Griffin Capital Essential Asset REIT to purchase Cole Office & Industrial REIT

The White Law Group continues to investigate potential claims involving broker-dealers who may have improperly recommended high risk non-traded REITs to investors such as Cole Office & Industrial REIT.

Griffin Capital Essential Asset REIT, Inc. (Griffin)  and Cole Office & Industrial REIT (CCIT II) announced a $1.2 billion stock-for-stock transaction this week, resulting in Griffin owning a portfolio of assets reportedly valued at approximately $5.8 billion, according to recent filings with the SEC.

Griffin notes that the strategic benefits of the merger include complementary investment strategies; “both portfolios consist of high-quality office and industrial properties with long-term net leases to creditworthy tenants and contractual rent escalations that generate durable and predictable net cash flows,” according to a press announcement on November 2. 

Apparently CCIT II previously entered into a definitive merger agreement with CIM Real Estate Finance Trust, Inc. on August 30, 2020, but the REIT exercised its right to terminate the merger agreement with CIM Real Estate Finance Trust and accepted the proposal from Griffin Capital Essential Asset REIT instead.

In exchange for each share of CCIT II common stock, CCIT II stockholders will receive 1.392 shares of Griffin Capital Essential Asset REIT Class E common stock.

The exchange ratio indicates a transaction price of $12.33 per CCIT II share, before transaction expenses, based on the latest reported net asset value as of June 30, 2020, .

Current CCIT II stockholders will reportedly own approximately 26.4 percent of the combined company and current Griffin Capital Essential Asset REIT stockholders will own approximately 73.6 percent, on a pro forma basis, immediately following the merger.

Based on the existing distribution policy of Griffin, CCIT II stockholders would receive an equivalent implied annualized distribution of $0.49 for each CCIT II share currently held.

If CCIT II shareholders approve the merger and all conditions are met, it will close in the first quarter of 2021.

Recovery of Investment Losses

Non-traded REITs (Real Estate Investment Trusts) are high-risk, often have high commissions, and lack liquidity.

The White Law Group has represented numerous investors over the last few years in non-traded REITs in large part because of their high commission structure and the possibility that unscrupulous financial advisors will push these products unsuitably to maximize their own commissions.

Brokerage firms are required to perform adequate due diligence on any investment they recommend and to ensure that all recommendations are suitable for the investor in light of that particular investor’s age, investment experience, net worth, risk tolerance, investment objectives, and income.  Firms that fail to perform adequate due diligence or that make unsuitable recommendations can be held responsible for investment losses in a FINRA arbitration claim.

If you are concerned about your investment in Cole Office & Industrial REIT (CCIT II) and would like to discuss your options, please call the securities attorneys of The White Law Group at (888)637-5510 for a free consultation.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee.  The firm represents investors in FINRA arbitration claims throughout the country.  For more information on the firm, visit http://whitesecuritieslaw.com.