UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 8-K


CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): August 18, 2015

Cole Office & Industrial REIT (CCIT II), Inc.
(Exact Name of Registrant as Specified in Its Charter)
 
 
 
 
 
 
 
 
 
 
Maryland
 
000-55436
 
46-2218486
(State or other jurisdiction of incorporation or organization)
 
(Commission File Number)
 
(I.R.S. Employer
Identification No.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2325 East Camelback Road, Suite 1100, Phoenix, Arizona 85016
(Address of principal executive offices)
(Zip Code)
 
(602) 778-8700
(Registrant’s telephone number, including area code)
 
None
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 
 






Item 1.01
Entry into a Material Definitive Agreement
The information set forth under Item 2.01 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 1.01 in its entirety.
Keurig Green Mountain — Burlington, MA — On August 18, 2015, ARCP OFC Burlington MA (Phase 2), LLC, a Delaware limited liability company and a wholly-owned subsidiary of Cole Corporate Income Operating Partnership II, LP (“CCI II OP”), the operating partnership of Cole Office & Industrial REIT (CCIT II), Inc. (the “Company”), entered into an agreement of purchase and sale with Burlington Crossing Realty Trust, a Massachusetts nominee trust (the “Seller”), which is not affiliated with the Company, its advisor or affiliates (the “Purchase Agreement”). The Company and its affiliates maintain no material relationships with the Seller or its affiliates, other than in respect of the parties’ entry into the Purchase Agreement. Pursuant to the terms of the Purchase Agreement, CCI II OP purchased an office building located in Burlington, MA (the “Property”) with approximately 280,560 square feet that is 100% leased to Keurig Green Mountain, Inc., a Vermont corporation, for a purchase price of $119.8 million, exclusive of closing costs. The Property was constructed in 2014.
Item 2.01
Completion of Acquisition or Disposition of Assets
The information set forth under Item 1.01 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 2.01 in its entirety.
On August 18, 2015, CCI II OP, through its wholly-owned subsidiary mentioned above, acquired the Property from the Seller. The principal provisions of the lease for the sole tenant at the Property are set forth in the following table:
Property
 
Sole Tenant
 
Total Square Feet Leased
 
% of Total Rentable Square Feet
 
Renewal Options (1)
 
Effective Annual Base Rent (2)
 
Effective Annual Base Rent per Square Foot (2)
 
Lease Term (3)
Keurig Green Mountain — Burlington, MA
 
Keurig Green Mountain, Inc.
 
280,560

 
100%
 
4/5 yr.
 
$
8,388,744

 
$
29.90

 
8/18/2015
6/29/2019
 
 
 
 
 
 
 
 
$
8,669,304

 
$
30.90

 
6/30/2019
6/29/2024
 
 
 
 
 
 
 
 
 
 
$
9,034,032

 
$
32.20

 
6/30/2024
6/29/2029
 
 
 
 
 
 
 
 
 
 
$
9,398,760

 
$
33.50

 
6/30/2029
11/14/2029
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)
Represents the number of renewal options and the term of each option.
(2)
Effective annual base rent and effective annual base rent per square foot include adjustments for rent concessions or abatements, if any. In general, the Company intends for its properties to be subject to long-term triple or double-net leases that require the tenants to pay substantially all operating expenses in addition to base rent. The Property is subject to a double-net lease.
(3)
Represents the lease term beginning with the later of the purchase date or the rent commencement date through the end of the non-cancelable lease term, assuming no renewals are exercised.
The purchase of the Property was funded with proceeds from the Company’s ongoing public offering of common stock and borrowings from the Company’s secured revolving credit facility with JPMorgan Chase Bank, N.A. as administrative agent, as described in the Company’s Current Report on Form 8-K and Quarterly Report on Form 10-Q filed with the U.S. Securities and Exchange Commission on December 18, 2014 and August 14, 2015, respectively (the “Amended Credit Facility”). In connection with the acquisition, CCI II OP borrowed approximately $110.0 million under the Amended Credit Facility. In connection with the acquisition, the Company paid an affiliate of Cole Corporate Income Advisors II, LLC, its advisor, an acquisition fee of $2.4 million. Other than in respect of the Company’s acquisition of the Property from the Seller pursuant to the Purchase Agreement described above, the Company, its advisor, its directors, its officers and their respective associates and affiliates have no relationship with the Seller and its affiliates.

2



In evaluating the Property as a potential acquisition, including the determination of an appropriate purchase price to be paid for the Property, the Company considered a variety of factors including: the condition and financial performance of the Property; the terms of the existing lease and the creditworthiness of the tenant; property location, visibility and access; age of the Property, physical condition and curb appeal; neighboring property uses; local market conditions, including vacancy rates; area demographics, including trade area population and average household income; and neighborhood growth patterns and economic conditions. The Company does not currently have plans to incur any significant costs to renovate, improve or develop the Property, and the Company believes that the Property is adequately insured.
Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The information pertaining to the Company’s borrowings under the Amended Credit Facility set forth under Item 2.01 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 2.03.
Item 9.01
Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired.
Since it is impracticable to provide the required financial statements for the Property described above at the time of this filing, and no financial statements (audited or unaudited) are available at this time, the Company hereby confirms that the required financial statements will be filed on or before November 3, 2015, which date is within the period allowed to file such an amendment.
(b) Pro Forma Financial Information.
See paragraph (a) above.



3



SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


Dated: August 24, 2015
COLE OFFICE & INDUSTRIAL REIT (CCIT II), INC.
 
By:
/s/ Simon J. Misselbrook
 
 
Name:
Simon J. Misselbrook
 
 
Title:
Chief Financial Officer and Treasurer
 
 
 
(Principal Financial Officer)
 


4