Spirit Realty Capital has plans to create Spirit MTA REIT.
“We have made significant steps toward the completion of our proposed spin-off transaction, which we believe is the best path forward for long-term shareholder growth,” stated Jackson Hsieh, president and CEO, in a statement.
SMTA will hold, directly or indirectly, the assets that collateralize Master Trust 2014 (part of Spirit’s asset-backed securitization program), almost all the properties that Spirit leases to Shopko Retail Shops Holding Corp. and certain of its affiliates, as well as certain other assets. The spin-off is currently anticipated to be completed in the first half of 2018.
As of Dec. 31, 2017, Master Trust 2014’s diversified portfolio accounted for 73.6 percent of our contractual rent and consisted of 784 owned properties and mortgage loans receivable secured by an additional six properties, with approximately 195 tenants operating in 44 states across 23 industries, including restaurants — quick service, restaurants — casual dining, movie theaters and medical/other office.
According to the filing, the firm believes “it would be difficult for a new competitor to replicate such a diversified portfolio on a comparable scale. The diversity of the Master Trust 2014 portfolio reduces the risks associated with adverse events affecting a particular tenant or an economic decline in any particular industry. Additionally, the scale of this portfolio allows us to make acquisitions without introducing additional concentration risks.”
During the year ended Dec. 31, 2017, Spirit Realty Capital sold 192 properties for $551.2 million in gross proceeds, including the sale of 87 income-producing properties for $397.5 million, with a weighted average capitalization rate of 7.11 percent. The remaining 105 properties were vacant and sold for $153.7 million.
And during the year ended Dec. 31, 2017, Spirit continued to reduce the concentration of its largest tenant, Shopko, as a percent of contractual rent with the sale of 12 revenue-producing Shopko properties for $71.4 million in gross proceeds at a weighted average cap rate of 7.72 percent. As of Dec. 31, 2017, Spirit had reduced its Shopko concentration to 7.7 percent of contractual rent compared to 8.2 percent at Dec. 31, 2016.
At Dec. 31, 2017, Spirit’s diversified real estate portfolio remained essentially fully occupied at 99.2 percent and was comprised of 2,392 owned properties, of which 19 were vacant.