CorEnergy Infrastructure Trust Inc. (NYSE: CORR) said Dec. 21 it sold its Portland Terminal Facility and its remaining interest in the Joliet Terminal to Zenith Energy Terminals Holdings for $61 million.
The Portland Terminal, a petroleum products terminal facility in Portland, Ore., was purchased by CorEnergy in January 2014 for $42 million. The company investing an additional $10 million for improvements in the asset. Zenith became the parent company of the tenant when it purchased the original tenant, a subsidiary of Arc Logistics LP, in December 2017.
Pursuant to CorEnergy’s lease agreement with its tenant, Zenith had the option, effective in February 2017, to purchase the terminal. Following an asset and market review, CorEnergy and Zenith entered a negotiated sale.
“The rent payments CorEnergy received on the Portland Terminal over the last five years, as well as the gain on sale from this transaction, have provided a total annual return within CorEnergy’s low to mid-teens target range for this type of asset,” said CorEnergy’s CEO and president, Dave Schulte, in a statement.
Additionally, CorEnergy valued its remaining interests in Joliet, the owner of a multi-purpose storage facility in Illinois, at roughly $1.2 million. The company was not anticipating receiving material distributions from the investment in the near term, according to a CorEnergy press release.
Schulte said he expects CorEnergy to invest in another asset in 2019 with the funds it is receiving.
“We remain committed to our underwriting disciplines and also have the flexibility to deleverage to further strengthen our capital structure,” Schulte added noting he doesn’t expect the sale of the Portland Terminal to affect CorEnergy’s ability to maintain its current quarterly dividend of $0.75 per share.
As of Dec. 21, CorEnergy had repurchased 177,773 shares of its 7.375% series A preferred stock, for about $4.3 million, according to the company release.
Based in Kansas City, Mo., CorEnergy is a real estate investment trust that owns essential energy assets, such as pipelines, storage terminals and transmission and distribution assets.
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