Cole Real Estate Investments Inc
Cole Real Estate Investments — Merger or Acquisition (October 2013)
31 slides from Cole Real Estate Investments's merger presentation, Oct 23, 2013
Slide 1: ARCP and Cole to Merge and Create World's Largest Net Lease REIT
Exhibit 99.1 ARCP and Create World’s ColeLargest Merge Net to Lease REIT
Slide 2: Forward-Looking Statements
2Information (as statements” Capital Cole (“Cole”) number forward-looking contemplated expectations, regarding from The statements: merger merger; IV may approvals connection management’s the operating agreements; expected Cole’s www.sec.gov. at and materials Forward-Looking merger defined proposed
Slide 3: Exceptional Merger Opportunities Summary
3 xceptional Merger Size opportunities Significant $70 Financial Dividend $1.00. AFFO growth $1.19 B grade Net Deleveraging: securities, .E from Extensive approximately (1) xecutive est-in-Class Assumes debt million and deep tenancy, per 86% payout estimates Creates to scale Benefits per share Portf
Slide 4: Summary Merger Terms and Consideration
4Summary Consideration 1.0929 Aggregate Implied closing Common to A -C $2.75 Financing: Closing Timing: Subject (1) or Based (2) dividend ARCP ole RCP Cole $1.00 CapLease. stockholders: billion on Acquiring common stockholders: will ARCP price stockholders to stock expected per increase per an Divid
Slide 5: Stockholder Benefits: Net Lease Leadership
Stockholder 5Net Lease Leadership Benefits
Slide 6: Net Lease Leadership: Largest Net Lease REIT by Enterprise Value
6NetWPC Enterprise 64% Source: the and $25.0 (1) (2) $21.5 ARCPBased completion Lease other Larger $20.0 $13.1 Pro SNL includes pipeline on Leadership: Value Forma than $15.0 $10.6 ARCP Financial of($ Closest the O announced properties. $10.0 $10.3 in stock WPC CapLease billions) World’s and $5.0 $9
Slide 7: Valuation Benefits of Scale; Multiples and Dividend Yield vs. Peers
72014 2014 Source: Note: LRY, CWH, WRE. AVB, Net CBL. AFFO 15.0x 15.9x 19.7x 22.7x 6.8x 4.7x 16.2x 18.0x 1.8x Office Industrial 3.7% 2.4% 2.8% 90 Multifamily 4.2% 130 14.8x 17.1x 2.3x Sector Malls 3.4% 2.9% 50 Residential Equity Group Property Simon Properties Boston ProLogis bps Lease bps premium A
Slide 8: Leadership: S&P Inclusion and Peer Comparison
R4rologis, Equity S&P #Industry Yield Dividend Inclusion S $49,575 2A 27 1.4 331,651 Self-Storage 29,487 4W Specialty 17,660 E 2.9 19,988 6P 23 2.8 Industrial 720,283 20 19,381 4.9 8V 18 19,306 4.1 9H Health 18,643 4.7 AvalonBay 10 19 3.2 Multi-family 17,372 Vornado 11 3.3 Diversified 16,773 Boston
Slide 9: Superior Access to Capital: Trading Volume and Index Weighting
Nrologis (“RMZ”) Source: the and elect RMZ Market Company (% 3-Month Volume 21S $195 8.8% 3G 5.3% 4E 5P 93 63.6% 87 7V 122 3.5% 8H 102 3.4% 9A 110 3.3% Vornado 10 82 3.1% Boston 11 72 Host 12 92 3.0% ARCP 112 2.5% SL 13 156 (1) Kimco 14 60 1.6% Macerich 15 69 Top 50 1.5% $1,402 51.2% imon ublic quit
Slide 10: Net Lease Sector Growth and Consolidation
Netthe 10 Source: (1)2013 of the and ARCP(1) $70 Total Billions 2012 2011 2010 2009 2008 (2) Ticker (1) $64.2 $32.1 $18.7 $16.5 $13.9 $13.1 WPC remaining Lease other $60 Enterprise CapLease SNL ARCP $50 includes pipeline COLE Leadership: $40 Financial acquisitions represents Value merger, ADC $30 an
Slide 11: Greater Scale, Previously Under-Covered Sector Consolidation
Net 11 Greater Previously highly O Stable Attractive Scale Increased A -S lead and Similar Consolidation: Size Leaders uperior trategic verconversion bility Lease under-covered, dialogue and $27 Advantages: Income relevant to M&A Sector and Skill access partner billion scale absorb for Leadership: c
Slide 12: Stockholder Benefits: Best-in-Class Portfolio
Stockholder Benefits Best-in-Class 12 Portfolio
Slide 13: Best-in-Class Portfolio
Best-in-Class 13 Total 3,732 Properties 102 Investment Average 99% Occupancy 47% Rent) Lease 11 Enterprise $21.5 Pro Source: the and (2) 22, Largest (1) years Represents Based remaining 2013. Forma other million Square billion Term and SNL Remaining pipeline on Value Grade (by Highest ARCP Feet Fina
Slide 14: Best-in-Class Tenancy
Tenants % 114 B BB+ 2.0% 2.1% 2.5% BBB+ 2.9% A- 3.1% BBB 3.5% T A 1.8% AA+ 1.9% BBB- Best-in-Class 83.1% 23.7% Tenancy ARCP 100% 16.9% Investment Non-Investment Strong Note: (1) the and .9% otal ofRepresents remaining other Rent Weighted of Pro 83.1% and are Among Top pipeline Rating Forma(1) Divers
Slide 15: Best-in-Class Asset Diversification
15 Represents Single Multi-Tenant ARCP 13.9% 51.1% 11.1% 23.9% 18.9% 26.2% 54.9% Source: Forma Note: the and Best-in-Class (1) 7.7% 25.0% 21.0% 46.3% COLEremaining other Weighted Tenant Pro SNL pipeline Financial, Retail Portfolio: Retail Industrial/Distribution Office acquisitions pro byproperties.
Slide 16: Best-in-Class Geographic Diversification
ARCP 16 Best-in-Class COLE Forma Geographic State S T % Source: 56.1% 64.8% 55.3% 3.1% 3.0% SC 3.6% MI 3.8% 3.2% 4.2% IN 4.0% 3.4% NJ OH 4.1% 5.3% 4.3% MO 5.8% 6.8% 5.1% 7.4% CA 6.0% 6.2% 8.1% AZ 6.1% PA 6.3% FL 8.2% GA 7.0% IL 13.2% 16.3% TX 10.7% Note: (1) the and tate X Represents remaining other
Slide 17: Best-in-Class Mature Lease Maturity Profile
Based (1) 17 ARCT 4.0% Best-in-Class Years Weighted Profile ARCP 0.2 41640 0.015694376 0.18 ofon 42005 Pro IV Leases 0.16 percentage Average merger, Forma 0.14 42370 2.8% Portfolio: Mature Lease the 0.12 Remaining 4.1% 42736 ofremaining 0.1 on GAAP Attractive Maturities 6.3% Average 0.08 43101 Lease
Slide 18: Stockholder Financial Benefits
Stockholder Financial 18 Benefits Benefits
Slide 19: Financial Benefits Including AFFO Increase
19Including AFFO 2014 $0.95 Increase Increased of elect Operational 51.8% $70 and Combined Potential line Improved .Debt preferred Financial Based (1) Assumes (2)85% elimination with million toper on Growth: guidance receive to EBITDA in its ability Cole securities, an Benefits: share. annualized Le
Slide 20: Anticipated 2014 Pro Forma Guidance
20 fully Anticipated High Low $1.20 $1.14 ARCP $1.19 $1.13 Pro (Pre-Cole 12/31/13 (Post-Cole 12/31/14 7.7x 9.1x Net 8.7x 11.2x 2014 51% 59% $11.2B including Cole costs stock, $70M $0.06 $1.00/share $2.0B ratio) Fully acquisitions shares: YE Assumes (1) Inland Forma Debt stockholders AFFO FFO Key dil
Slide 21: Financial Benefits: Dividend Increase
AFFO 21 (1) (2) (3) Financial 8th Historical $1.020 Q4 ARCP ARCP+ $0.875 Based Dividends Effective 2011 Increase payout Current $1.000 $0.880 COLE Q1Benefits: upon Annualized in 2012 with based ratio $0.980 $0.885 ARCP’s Pro dividend the Q2 Forma Increased ofonearlier 2012 85 Dividend(2) $0.960 $0.8
Slide 22: Executive Compensation and G&A Synergies
($70.3 22 Executive Stock 13.6 Attrition G&A 7.8 Corporate 16.7 Total $27.7 Combined Synergies $246.0 $70 29% Financial 4.5 inMillion millions) Synergies expense compensation Benefits: % compensation expense G&A of ofreduction Synergies G&A before elimination Expected synergies in Year Synergies One
Slide 23: Significant Integration Experience
Significant Experience Integration 23
Slide 24: ARCP Integration Focus
Integration 24 ARCP Focus Approximately $774,000,000 $502,000,000 $2,200,000,000 Acquisition Portfolio Closed Expected $3,100,000,000 Announced Merger $3,000,000,000 Full $2,000,000,000 Acquisitions Year on has June February minimizing Organic toextensive Experience August Close 2013 Year-to-Date $1
Slide 25: Large, Premier Powerful Sponsor/Operator
25arge, Premier Powerful 2007 Deep Proven A -L Cole Business Continues Maintain Retain Sole AR Average programs cquired premier Capital, Sponsor/Operator Today: Tomorrow: Private broker-dealer dedicated key Real real Sponsor: of as Cole Distribution over since net to executives $2 estate Usual: LLC
Slide 26: Pro Forma Organizational Chart
Office, 26 Retail Build-to-Suit Private Restaurants Distribution General Pro President Supported Asset Due Underwriting Originations Markets Capital Resources Human Legal Accounting Management Property Board Marketing Relations Investor 6Financing Chief Independent Forma Diligence Operating Financia
Slide 27: Experienced Senior Management and Value Proposition
Senior Experienced 27 Experience traded Expertise managing Skill portfolios Best-in-Class markets High quality Stable Diversified Enhanced Proposition Value Durable Competitiveness Principal Outsized Strong, Balance Operational Cost Financial ARCP of Reductions in quality companies income Offers Man
Slide 28: FFO/AFFO Reconciliation
28 income Net High Low 2014 Reconciliation Acquisition $0.59 $0.53 Depreciation $0.04 Amortization $1.20 $1.14 FFO $0.57 Straight-line Non-cash ($0.05) Non-GAAP $1.19 $1.13 AFFO $0.02 FFO/AFFO equity attributable and Reconciliation –rent and of transaction deferred compensation amortization tofinanc
Slide 29: Non-GAAP Measures Definitions
Funds 29 ARCP expenses, cash the factors and based periods estate presentation use FFO from are accounting amounts These Additionally, assets amortization analysis that useful real As provide appropriate anot performance historical gains estate assists mark-to-market result, and non-GAAP values on a
Slide 30: Additional Information
This 30 vote registration proposed related AMENDMENTS FILED WITH THEY IMPORTANT Investors through available ARCP, solicitation ARCP’s Information on statement/prospectus SEC they using Additional April or become communication inthe THE WILL matters. Cole, approval. BY connection the directors 11, fr
Slide 31: Additional Information (ARCT IV)
This 31 vote an registration ARE ALL IF THE Investors by www.sec.gov. www.arcpreit.com ARCP, solicitation directors Information with the proposed website Additional AND amendment ARCP proxy or communication the AMENDMENTS PROPOSED URGED ARCT approval. at and WHEN SEC and ARCT may and statement/prosp
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