CIM Real Estate Finance Trust Ends REIT Status in Combination With CIM Group Platform
CIM Real Estate Finance Trust, also known as CMFT, has completed a fundamental restructuring that eliminates its status as a real estate investment trust, dilutes its existing shareholders to a 32.5% economic interest, and transforms the fund into the public-facing holding company for CIM Group’s entire real assets management platform, the company disclosed June 29.
The REIT was originally launched in 2012 as Cole Credit Property Trust IV and raised more than $3 billion from retail investors before closing its offering in April 2014. CIM Group acquired the entity from VEREIT in 2018.
The transactions, which closed June 24, involved CIM Group Holdings, LLC – a subsidiary of CIM Group, LLC – contributing CIM Group’s real assets management business and portfolio to a newly formed operating partnership in exchange for 907,376,073 operating partnership units and an equal number of special voting preferred shares, representing approximately 67.5% voting and economic ownership of the combined company. The fund’s existing shareholders retained the remaining 32.5% through their continued ownership of approximately 436.9 million common shares.
The combined company, renamed CIM Group, Inc., will operate as a diversified owner, operator, lender, developer, and real assets management platform with more than $30 billion in assets owned and operated across five platforms: real estate, credit, infrastructure, opportunity zones, and strategic opportunities. The board determined that the fund will no longer qualify as a REIT under the Internal Revenue Code, with the REIT election terminating effective Jan. 1, 2026.
“For over 30 years at CIM Group, LLC, we have focused on building a diversified real assets platform capable of creating value across market cycles,” said Richard Ressler, chief executive officer of CIM. “This transaction represents the next evolution of that strategy. With CMFT and CIM Group, LLC’s platforms together, we are creating a real assets manager with greater scale, stronger alignment, enhanced resources, and a commitment to long-term value creation, while preserving continuity across our leadership team, investment professionals, and operations.”
For investors who purchased shares at the fund’s original $10.00 offering price beginning in 2012, the transformation represents a fundamental change to the nature of their investment. AltsWire reported in April that the board set a new estimated per share net asset value of $5.14 as of Dec. 31, 2025, a decline of nearly 49% from the original offering price. That valuation will remain in effect for distribution reinvestment plan and share redemption purposes until the board approves a new estimate. The REIT election termination carries potential tax consequences for shareholders, who held their investment through a tax-advantaged REIT structure; the company said shareholders should consult their tax advisers.
The deal establishes a contractual dividend floor for three years: the operating partnership is required to distribute sufficient funds for the company to pay quarterly dividends of at least $0.06 per common share for the first four quarters following closing, $0.07 per share for the next four quarters, and $0.095 per share for the four quarters after that. At $0.06 per quarter, the annualized rate of $0.24 per share represents a yield of approximately 4.7% on the current $5.14 NAV, below the 6.6% annualized rate in effect prior to the January 2025 distribution reduction. Future dividends beyond the three-year commitment period will be at the discretion of the board.
The restructuring establishes a five-year path toward a potential liquidity event. The company agreed to use commercially reasonable efforts to initiate a listing process on a national securities exchange within 24 months of closing and to consummate such a listing within five years. If no listing occurs by the five-year mark, the board must evaluate and pursue a recapitalization transaction. If CIM Group Holdings determines a recapitalization is not likely to be completed within one year after the fifth anniversary, it may require the company to pursue alternative strategic transactions, including a sale, business combination, or other liquidity event.
The transaction also includes an earnout provision allowing CIM Group Holdings to receive additional operating partnership units worth up to approximately 3.75% incremental ownership if certain financial performance metrics are achieved from Jan. 1, 2026, through Dec. 31, 2028.
The restructuring changes the landscape for third-party tender activity. Comrit Investments 1 LP, a Tel Aviv-based investment fund that holds a position in CMFT shares and has launched multiple unsolicited tender offers at steep discounts to stated NAV, now operates against a combined entity in which CIM Group Holdings controls 67.5% of economic and voting ownership and holds consent rights over major corporate actions. The contribution agreement gives CIM Group Holdings the ability, under defined circumstances, to require the company to pursue strategic transactions.
A new governance structure accompanies the transaction. Three existing independent directors – T. Patrick Duncan, W. Brian Kretzmer, and Howard A. Silver – will continue serving until at least the first anniversary of a listing or other liquidity event. CIM Group Holdings will vote its special voting preferred shares to support their continued tenure. CIM co-founders Avraham Shemesh and Shaul Kuba will join the board, along with an additional CIM-designated independent director. Richard Ressler, the third co-founder, was previously serving on the board.
The company also appointed David Thompson as chief financial officer, principal accounting officer, and treasurer, effective June 24, replacing Nathan D. DeBacker. Thompson has served as CEO of Creative Media & Community Trust Corporation (Nasdaq: CMCT) since March 2019 and as a principal and CFO of CIM Group, L.P. He also serves as CEO of CIM Real Assets & Credit Fund, a closed-end interval fund.
A tax receivable agreement entered into as part of the transaction requires the company to pay CIM Group Holdings 85% of certain tax benefits realized as a result of increases in tax basis arising from future exchanges of operating partnership units.
CIM Real Estate Finance Trust raised more than $3 billion from retail investors during its offering period, which ran from January 2012 through April 2014. AltsWire reported in May that the fund posted $43 million in net income in the first quarter of 2026, swinging from a $32.9 million loss in the same period a year earlier, as a surge in loan repayments triggered a credit reserve release.
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