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Cole Credit Property Trust III, Inc. Completes Acquisition Of Cole Holdings Corporation

PHOENIX, April 5, 2013 /PRNewswire/ -- Cole Credit Property Trust III, Inc. ("CCPT III") today announced the closing of its previously announced acquisition of Cole Holdings Corporation ("Cole Holdings"), a full-scale real estate investment management firm that currently manages over $12 billion of real estate assets for over 160,000 individual investors represented by more than 13,000 financial advisors.  CCPT III will pursue a listing on the New York Stock Exchange ("NYSE"), which is expected to occur in June 2013. 

Upon a successful listing on the NYSE, CCPT III will be the 2 nd largest publicly-traded REIT in the net-lease sector.  Cole Holdings provides CCPT III with a proven management team and a full-scale real estate investment management platform with over 350 employees, as well as a portfolio of more than 2,000 properties with over 76 million square feet of corporate real estate under management.   Upon a listing on the NYSE, CCPT III will be well positioned to achieve inclusion in a variety of indices over time, such as the Russell 1000, Russell Midcap and MSCI U.S. REIT Indices.

Leonard Wood, chairman of the special committee of the CCPT III board of directors, said, "We are pleased to complete the acquisition of Cole Holdings, which provides our stockholders with additional growth potential and increased access to capital.  We expect to drive additional value for stockholders by leveraging the accretive benefits associated with self-management – by the same real estate management platform that has acquired and managed the industry-leading real estate assets of CCPT III since its inception.  We look forward to further enhancing value for our stockholders as a publicly-traded company following our anticipated NYSE listing in June."  

Christopher Cole, founder and executive chairman of Cole Holdings, stated, "This is a major milestone in the history of Cole Holdings and CCPT III.  The transaction positions us to realize our vision of creating a world-class real estate platform and providing investors the benefits of owning high-quality, income-producing real estate leased long term to credit-worthy corporations.  We look forward to becoming one of the largest publicly-traded REITs in the net-lease sector and to providing enhanced dividend expansion and significant growth potential to our stockholders."

Marc Nemer, president and chief executive officer of Cole Holdings, stated, "We are excited to begin delivering on the substantial growth potential and income generation that this combination offers to all CCPT III stockholders.  We believe this transaction provides recognition of the value proposition of the non-listed REIT industry and we look forward to capitalizing on the significant opportunities it will deliver to investors for generations to come."

The combination will provide important benefits to CCPT III stockholders, including:
  • Proven Real Estate Management Platform:  Cole Holdings provides CCPT III with a leading real estate investment management platform that features both traditional and fee-based real estate investment products.  Since its founding in 1979, Cole Holdings has built a proven, integrated management team with in-house capabilities in key areas of asset management, acquisitions, leasing, financing, capital markets, client service and stockholder operations.  As one of the most successful firms in terms of distributing real estate investment solutions to retail investors, Cole Holdings is an attractive growth business of substantial size comparable to many of the leading real estate and alternative investment managers.  The third-party investment management business offers attractive earnings and capital appreciation potential.
  • Management Continuity:  CCPT III will continue to benefit from the knowledge and operational efficiencies resulting from seamless integration of the same real estate management platform that has acquired and managed the real estate assets of CCPT III since its inception.
  • Accretive Transaction Providing an Increased Dividend:  With a market-leading, diverse asset portfolio and strengthened FFO, CCPT III is well positioned to deliver enhanced dividend growth, supported, in part, by the expected accretion and anticipated cash flow growth resulting from the acquisition of an institutional-quality investment management business, which will generate revenue by managing other real estate vehicles.  In addition, CCPT III's board of directors has authorized an increase in the company's dividend rate from an annualized rate of $0.65 per share to an annualized rate of $0.70 per share effective upon the closing of the transaction.
  • Liquidity:  Assuming listing on the NYSE as planned, stockholders will have even greater access to liquidity with the flexibility to sell or retain shares based on public market value.  For CCPT III stockholders, this represents the opportunity to achieve a liquidity event substantially earlier than was previously anticipated.
  • Greater Capital Markets Access:  With the acquisition of Cole Holdings, CCPT III now has the opportunity not only to continue raising capital from retail distribution channels, but also to increase its access to institutional investors and related capital sources.  In addition to the organic capital raising opportunities, CCPT III will be better positioned to seek other accretive opportunities once a listing on the NYSE has occurred.  And with the ability to offer multiple investment vehicles (e.g. listed shares, non-listed offerings), CCPT III will appeal to a broad range of current and potential investors.
  • New Fee Income: CCPT III will benefit from its new income stream of fees earned by Cole Holdings from the management of other real estate vehicles, including Cole Credit Property Trust IV, Inc., Cole Corporate Income Trust, Inc. and Cole Real Estate Income Strategy (Daily NAV), Inc.
  • Elimination of Management Fee Expense:  CCPT III will benefit from cost savings resulting from the elimination of its external management fees.

CCPT III is seeking stockholder approval to amend its charter to eliminate provisions applicable to non-listed companies and to more closely reflect the charters of its publicly traded peers at its annual meeting to be held in June 2013.  CCPT III intends to list its common shares on the NYSE promptly after the charter is amended. 

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