Firm Capital Property Trust Announces $27 Million Four Property Acquisition
TORONTO, Nov. 9, 2012 /CNW/ - Firm Capital Property Trust is pleased to announce that it has entered into a purchase agreement to acquire a portfolio of four retail properties.
Firm Capital Property Trust ("FCPT") has entered into a purchase agreement with Calloway REIT to acquire four retail properties for a total purchase price of approximately $27 million (inclusive of transaction costs) (the "Acquisition"). Three of the properties are located in Ontario, and one is located in Nova Scotia. Key characteristics of the portfolio are as follows:
- 114,000 square feet of GLA
- All of the properties were built in the last 12 years
- 4.5 years average remaining lease term
- 97% leased with 72% occupied by national tenants
- No significant short term lease maturities
"We are excited about the high quality portfolio that we were able to acquire as our first acquisition. The properties will provide stable cash flows and a solid foundation from which to grow our portfolio. Each property is located in a retail node close to residential communities and is shadow anchored by a well-known national retailer," said Robert McKee, Chief Executive Officer.
FCPT intends to fund the purchase price through, a marketed private placement for $10.0 million, a previously announced equity financing of $9.0 million and a credit facility from a Canadian financial institution secured on the four properties. The Acquisition will allow the Trust to have the following attributes on closing:
- Targeted annual distribution of $0.35 resulting in a 7% yield at $5.00 per unit
- Target AFFO payout ratio of 85% to 95% once excess equity is fully deployed
- Low leverage on closing with a Debt to GBV less than 25% (target 60% to 65%)
- Estimated acquisition capacity of up to $26 million without the requirement to raise additional equity based on Debt to GBV of 60%.
The acquisition is expected to close by the end of November 2012 and is subject to the satisfaction of customary closing conditions.
ABOUT FIRM CAPITAL PROPERTY TRUST
Firm Capital Property Trust is focused on creating long-term value for Unitholders, through capital preservation and disciplined investing to achieve stable distributable income. In partnership with management and industry leaders, FCPT's plan is to co-own a diversified property portfolio of multi-residential, flex industrial, net lease convenience retail, and core service provider professional space. In addition to stand alone accretive acquisitions, FCPT will make acquisitions, on a co-ownership basis with strong financial co-owned partners and will make joint acquisitions and the acquisition of partial interests from existing co-ownership groups, in a manner that provides liquidity to those selling co-owners and professional management for those remaining as co-partners. Firm Capital Realty Partners Inc., through a structure focused on an alignment of interests with the Trust, and will source, syndicate and participate in investments.
FORWARD LOOKING INFORMATION
This press release may contain forward-looking statements. In some cases, forward-looking statements can be identified by the use of words such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue", and by discussions of strategies that involve risks and uncertainties. The forward-looking statements are based on certain key expectations and assumptions made by the Trust regarding, among other things, the use of the net proceeds from the Offering, the closing of the Offering, and the closing of the Acquisition. By their nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. Although management of the Trust believes that the expectations reflected in the forward-looking statements are reasonable, there can be no assurance that future results, levels of activity, performance or achievements will occur as anticipated. Neither the Trust nor any other person assumes responsibility for the accuracy and completeness of any forward-looking statements, and no one has any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or such other factors which affect this information, except as required by law.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, which may be made only by means of a prospectus, nor shall there be any sale of the Units in any state, province or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under securities laws of any such state, province or other jurisdiction. The Units of the Firm Capital Property Trust have not been, and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered, sold or delivered in the United States absent registration or an application for exemption from the registration requirements of U.S. securities laws.
SOURCE: Firm Capital Property TrustFor further information:
Firm Capital Property Trust
President & Chief Executive Officer