8-K - CMRF - Equibles

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
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CURRENT REPORT
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PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 19, 2020
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CIM Real Estate Finance Trust, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
Maryland	000-54939	27-3148022
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer<br><br>Identification No.)
2398 East Camelback Road, 4^th^ Floor, 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))

Securities registered pursuant to Section 12(b) of the Act:	Title of Each Class	Trading Symbol	Name of each exchange on which registered
None	None	None

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act o

Item 7.01	Regulation FD Disclosure.

Attached to this Form 8-K as Exhibit 99.1 is a copy of a letter from CIM Real Estate Finance Trust, Inc. (the “Company”) to its stockholders. Mailing of the letter to the Company’s stockholders will commence on or about May 19, 2020, and the letter is incorporated in its entirety into this Item 7.01.

The information in this report, including Exhibit 99.1, is being furnished pursuant to Item 7.01 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

Item 9.01	Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
99.1	CIM Real Estate Finance Trust, Inc. Letter to Stockholders, dated May 19, 2020.

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: May 19, 2020	CIM REAL ESTATE FINANCE TRUST, INC.
	By:	/s/ Nathan D. DeBacker
	Name:	Nathan D. DeBacker
	Title:	Chief Financial Officer and Treasurer
		(Principal Financial Officer)

		Exhibit

Exhibit 99.1

May 19, 2020

Dear Shareholder,

We hope you and your family are safe and well. We are navigating uncertain times as the COVID-19 pandemic continues to demonstrate far-reaching impacts. While the CIM Real Estate Finance Trust, Inc. (“CMFT”) portfolio will not escape the effects of the economic slowdown caused by COVID-19, we believe CMFT is well-positioned to maintain strength through the storm.

In 2019, CMFT announced its intention to pursue a more diversified investment strategy across the capital structure, ultimately transitioning to a mortgage REIT, by balancing its existing core of necessity commercial real estate assets with a portfolio of commercial mortgage loans and other real estate related credit investments in which CIM has expertise. To further this objective, CMFT sold a portfolio of single-tenant properties to Realty Income Corporation for approximately $1.2 billion and an additional 53 assets to other buyers for $428.6 million. The proceeds from these sales were used to repay debt, add liquidity to CMFT’s balance sheet and deploy into new real estate debt investments.

While we are proud of CMFT’s 2019 achievements, our focus is on managing the REIT effectively through the COVID-19 pandemic. We will be communicating with shareholders regularly in the coming months regarding these key initiatives.

Recent Actions in Response to COVID-19
Liquidity & Financing<br><br>» Our approach to financing is to maintain relatively low levels of leverage, utilizing unsecured financing where possible, and maximizing the tenor of outstanding debt. CMFT had a net leverage ratio of approximately 37.4% as of March 31, 2020 and benefitted from cash and available capacity on its revolving credit facility of approximately $318 million as of April 30, 2020.<br><br>» In an effort to position CMFT for long-term success, we are exploring opportunities to increase CMFT’s scale, as we believe larger companies will have a significant advantage as they navigate through and after the crisis.<br><br>Tenant Rent Collection & Support<br><br>» In April, CMFT received approximately 67% of base rent due from its tenants. In most cases where April rent has not been paid, CMFT has offered tenants temporary rent deferrals subject to further negotiation. We are working closely with tenants to address needs for rent relief, evaluating requests on a case-by-case basis.<br><br>» We moved rapidly to provide tenants requesting rent relief with information on government assistance programs. CIM is uniquely positioned to support tenants through its affiliate lender, which offers Paycheck Protection Program loans.	Cash Flow Management<br><br>» During this period of disruption, we will determine the timing and amount of distributions on a monthly instead of a quarterly basis, considering the monthly cash flow generated by CMFT’s operations and other available liquidity.<br><br>» We were pleased to declare a distribution for April 2020, albeit at the reduced monthly rate of $0.013 per share, which is approximately 25% of the most recent monthly distribution rate.<br><br>» Additionally, on May 1, 2020, we announced that the Board amended CMFT’s share redemption program and distribution reinvestment plan so that either plan may be suspended by the Board without delay at any time if the Board believes the action to be in the best interests of CMFT and its shareholders, allowing us to react quickly to changing economic circumstances.<br><br>Valuation Timing<br><br>» We believe it is appropriate to value CMFT’s assets on a quarterly instead of annual basis during this time to help ensure that CMFT’s share redemption program and distribution reinvestment plan are based on current values. We have engaged a third-party valuation firm to assess the value of CMFT’s assets and liabilities quarterly until economic conditions stabilize.

Recent Actions in Response to COVID-19

Liquidity & Financing » Our approach to financing is to maintain relatively low levels of leverage, utilizing unsecured financing where possible, and maximizing the tenor of outstanding debt. CMFT had a net leverage ratio of approximately 37.4% as of March 31, 2020 and benefitted from cash and available capacity on its revolving credit facility of approximately $318 million as of April 30, 2020. » In an effort to position CMFT for long-term success, we are exploring opportunities to increase CMFT’s scale, as we believe larger companies will have a significant advantage as they navigate through and after the crisis. Tenant Rent Collection & Support » In April, CMFT received approximately 67% of base rent due from its tenants. In most cases where April rent has not been paid, CMFT has offered tenants temporary rent deferrals subject to further negotiation. We are working closely with tenants to address needs for rent relief, evaluating requests on a case-by-case basis. » We moved rapidly to provide tenants requesting rent relief with information on government assistance programs. CIM is uniquely positioned to support tenants through its affiliate lender, which offers Paycheck Protection Program loans.

Cash Flow Management » During this period of disruption, we will determine the timing and amount of distributions on a monthly instead of a quarterly basis, considering the monthly cash flow generated by CMFT’s operations and other available liquidity. » We were pleased to declare a distribution for April 2020, albeit at the reduced monthly rate of $0.013 per share, which is approximately 25% of the most recent monthly distribution rate. » Additionally, on May 1, 2020, we announced that the Board amended CMFT’s share redemption program and distribution reinvestment plan so that either plan may be suspended by the Board without delay at any time if the Board believes the action to be in the best interests of CMFT and its shareholders, allowing us to react quickly to changing economic circumstances. Valuation Timing » We believe it is appropriate to value CMFT’s assets on a quarterly instead of annual basis during this time to help ensure that CMFT’s share redemption program and distribution reinvestment plan are based on current values. We have engaged a third-party valuation firm to assess the value of CMFT’s assets and liabilities quarterly until economic conditions stabilize.

While the full effects of the pandemic are unclear, we are committed to leaving no stone unturned managing CMFT in a manner that will provide the greatest benefit to you, our valued shareholders. Shareholders can view all of CMFT's communications and other disclosures that have been filed with the SEC by visiting www.cimgroup.com and clicking on “Investment Strategies,” then “Managed REIT Corporate Governance”. If you have any questions, please contact your financial advisor or the CIM Shareholder Relations team at 866.907.2653. We wish good health and safety for you and your family.

Sincerely,

Richard Ressler<br><br>Chairman of the Board of Directors, Chief Executive Officer and President<br><br>CIM Real Estate Finance Trust, Inc.<br><br>Co-Founder and Principal, CIM Group

CIM GROUP 2398 EAST CAMELBACK ROAD, 4TH FLOOR, PHOENIX ARIZONA 85016 PH 866.341.2653 FX 602.801.2736 CIMGROUP.COM

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