Morguard REIT announces Class A office acquisition in downtown Calgary
MISSISSAUGA, ON, Oct. 30, 2012 /CNW/ - Morguard Real Estate Investment Trust ("Morguard REIT" or the "REIT") (TSX: MRT.UN), announced today that it has finalized an agreement to purchase a 100% freehold interest in Penn West Plaza, Calgary, a Class A office property that is comprised of two office towers with 621,628 square feet of gross leasable area, 379 parking spaces and 17,766 square feet of prime retail space. The acquisition is expected to close on or about October 31, 2012 and conditions, other than customary closing conditions, have now been satisfied.
Penn West Plaza (207 & 213-9th Avenue S.W.) is located in the Central Business District of downtown Calgary. Both Class A office towers (other than ancillary retail space) are 100% leased to Penn West Petroleum Ltd. (NYSE: PWE TSX: PWT), and secured by a long-term net lease, with a remaining lease term of 12 years.
Penn West Plaza will be purchased free and clear of financial encumbrances for total consideration of approximately $374.3 million (excluding closing costs). The REIT expects to finance the purchase price with: (i) a mortgage in the principal amount of approximately $210 million for a term of ten years, bearing interest at 3.93% per annum; (ii) the net proceeds from the REIT's offering of 4.85% convertible unsecured subordinated debentures, due October 31, 2017, of approximately $145.7 million; and (iii) other available sources of funds.
About Morguard REIT
Morguard REIT is a closed-end real estate investment trust, which owns a diversified portfolio of 53 high quality retail, office and mixed use properties in Canada with an approximate value of $2.2 billion and comprising approximately 8.5 million square feet of leaseable space.
Certain information in this press release may constitute forward-looking statements that involve a number of risks and uncertainties, including statements regarding the outlook for the REIT's business results of operations. Forward-looking statements use the words "believe," "expect," "anticipate," "may," "should," "intend," "estimate" and other similar terms, which do not relate to historical matters. Such forward-looking statements involve known and unknown risks and uncertainties and other factors that may cause the actual results to differ materially from those indicated. Such factors include, but are not limited to, general economic conditions, the availability of new competitive supply of commercial real estate that may become available either through construction or sublease, the REIT's ability to maintain occupancy and to lease or re-lease space on a timely basis at current or anticipated rates, tenant bankruptcies, financial difficulties and defaults, changes in interest rates, changes in operating costs, the REIT's ability to obtain adequate insurance coverage at a reasonable cost, the ability to complete potential acquisitions (including the Penn West acquisition) and the availability of financing. The REIT believes that the expectations reflected in forward looking statements are based on reasonable assumptions; however, the REIT can give no assurance that actual results will be consistent with these forward-looking statements. Except as required by applicable law, the REIT disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Readers should be cautioned not to place undue reliance on the forward-looking statements.
SOURCE: Morguard Real Estate Investment TrustFor further information:
Mr. K. (Rai) Sahi, President and Chief Executive Officer
Morguard Real Estate Investment Trust
55 City Centre Drive