Attached files
| file | filename |
|---|---|
| 8-K - CCPT 8-K - Cole Credit Property Trust Inc | ccpt_8k.htm |
February
26, 2010
Dear
Stockholder,
The Board
of Directors of Cole Credit Property Trust, Inc. (CCPT) recently met and
approved two items that will impact you as an investor in CCPT. In
accordance with ERISA regulations, the Board valued our portfolio as of the year
ended December 31, 2009, in order to assist retirement plan fiduciaries, IRA
trustees and custodians with their annual reporting
requirements. Accordingly, the Board approved a net asset valuation
of $7.65 per share, which you will see on your January statement. The
Board relied on a number of relevant sources to determine this share valuation,
including an analysis conducted by a third-party investment banking firm with
expertise in this area. It is important to remember that this share
valuation is an estimate and represents only a snap-shot in
time. Most likely, it is not indicative of the price you would
receive for your shares in a liquidation event. The Board’s objective
is to undertake a liquidation or other exit strategy at a time that is most
opportune for our stockholders, and we believe the current valuation reflects
market lows for commercial real estate.
The Board
also declared a daily distribution rate of $0.001369999 per share effective
March 1, 2010. This equates to a 5% annualized distribution rate
based on a purchase price of $10 per share and a 6.54% annualized distribution
rate based on the current valuation of $7.65 per share. Our
disciplined investment strategy, which focuses on net leased properties leased
to well established, high-credit quality tenants, has enabled us to support a 7%
distribution rate for more than 4 years. However, we are now faced
with managing approximately $50 million of fixed-rate debt that is maturing by
year-end 2010. Given the current debt markets, these loans will be refinanced at
higher rates compared to when they were originally secured. They will
also have amortization provisions, requiring us to pay down a portion of the
principal on a monthly basis over the life of the loan. It is expected that the
portfolio will generate funds from operations in excess of the 5% distribution
rate, however, these principal payments reduce the amount of funds from
operations available for distribution. We believe that reducing the
total amount of outstanding debt through principal payments will help position
the portfolio for a healthy exit.
In light
of the near collapse of the credit markets and the prolonged economic recession,
to which no one is immune, we are very pleased with the way the portfolio is
weathering this storm and has maintained a 100% occupancy rate. Rest
assured, we will continue to manage this portfolio in the same conservative
fashion we always have. We look forward to the time when the
commercial real estate markets return to valuations that are more favorable and
in line with our goals of a successful portfolio exit.
If you
have any questions, we encourage you to speak with your financial
advisor. Thank you again for your investment and the trust you have
placed with us.
Sincerely,
Christopher
H. Cole
Chairman and CEO
Cole Real
Estate Investments • 2575 East Camelback Road, Suite
500 • Phoenix, Arizona 85016
P:
602.778.8700 • F:
602.778.8780 • www.ColeCapital.com