Monday, August 27, 2012

CCPT II - Exit Inches Forward

Cole Credit Property Trust II (CCPT II) just filed a letter it is sending to financial advisors.  The bulk the body of the letter is below:
Last summer, we communicated to you that we believed we may be moving into a healthy market environment for a liquidity event for Cole Credit Property Trust II, Inc. (CCPT II), and would be evaluating options to take this investment program full cycle. We want to provide you with an update on this important initiative.

Maximizing shareholder value is our highest priority, and the timing of any exit strategy is crucial. High-quality, income-oriented real estate portfolios like CCPT II are an attractive asset class in the present market environment. As you can imagine, maximizing value in an exit event is a long and complicated process, and the CCPT II Board of Directors and its advisors have been working hard to select the option that is best calculated to produce optimal results for our shareholders. Premature disclosure about the types of transactions under consideration can be problematic for both legal and business reasons.

While we are limited regarding our discussion of specifics at this time, we can report that the CCPT II Board engaged Morgan Stanley and UBS Investment Bank in March 2012, after an extensive investment banking interview process, to move as expeditiously as possible toward a successful exit event for CCPT II. The CCPT II Board is currently working extensively with Morgan Stanley and UBS Investment Bank on a few concrete options to create a successful exit transaction, and we hope to be in a position to share details with you soon.

CCPT II announced in June of 2011 that it would have an exit strategy within the next twelve months. That date passed quietly.  CCPT II, according to the letter, is working on liquidity options, and has engaged two investment banking firms to move the process forward.  It sounds like some form of announcement on exit strategies will be made "soon."  While the letter does not provide any new, concrete exit news, CCPT II working with two investment bankers is a positive step for those wanting a liquidity event. 


Anonymous said...

Just look when the assets were purchased, the remaining lease term, and the fact most of the assets are project financed and you can understand why one year came and went with no liquidity event. The pre-crisis basis and poor financing structure put on these assets will impair the ability to produce an exit event that gets the investors $10 back.

Anonymous said...

I find it amusing that they would include the statement " Premature disclosure about the types of transactions under consideration can be problematic for both legal and business reasons."

I know a wholesaler for Cole who has told advisors they were more than likely going to do a "private sale" of the portfolio. Now, the wholesaler could be wrong, but that doesn't change the fact they have stated this is what Cole was more than likely going to do.

The wholesaler also said Cole would not implement the exit strategy until they were able to get $10 a share.