Pure Industrial Real Estate Trust announces $129.4 million of property acquisitions and $50.5 million equity financing
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VANCOUVER, Jan. 21, 2013 /CNW/ - Pure Industrial Real Estate Trust (TSX: AAR.UN) ("PIRET") announced today that it has entered into conditional agreements to acquire $129.4 million of income producing properties (collectively, the "Acquisitions"), consisting of 15 industrial properties representing over 1.4 million square feet of gross leasable area ("GLA"). The Acquisitions consist of a property located in Richmond, British Columbia (the "Richmond Property"), a portfolio of four properties located in Edmonton, Alberta (the "Edmonton Portfolio"), a portfolio of six properties located in Delta, British Columbia, Crossfield, Alberta, Saskatoon, Saskatchewan, Winnipeg, Manitoba, and Ajax and Kitchener, Ontario (the "East-West Portfolio"), a portfolio of two properties located in Montreal, Quebec, and Toronto, Ontario (the "East Portfolio"), a property located in Halton Hills, Ontario (the "Halton Property") and a property located in Balzac, Alberta (the "Balzac Property"). The properties are being acquired at a weighted average going-in capitalization rate of 6.99%.
PIRET also announced today that it has entered into an agreement to sell to a syndicate of underwriters led by Canaccord Genuity Corp., on a bought deal basis, 10,000,000 trust units ("Units") at a price of $5.05 per Unit for gross proceeds to PIRET of $50.5 million (the "Financing"). PIRET has also granted the underwriters an overallotment option to purchase up to an additional 1,500,000 Units on the same terms and conditions, exercisable at any time, in whole or in part, up to 30 days after the closing of the Financing. The Financing is expected to close on or about February 12, 2013 and is subject to regulatory approval.
The net proceeds from the Financing, together with the proceeds of assumed and new mortgages, will be used to fund the Acquisitions, as follows:
The Richmond Property consists of one multi-tenant industrial property comprising 279,742 square feet of GLA. The Richmond Property is 100% leased to three high quality national tenants with a weighted average remaining lease term of approximately 7.25 years. The purchase price for the Richmond Property is $32.3 million, representing a 6.04% going-in capitalization rate.
The Edmonton Portfolio consists of one multi-tenant and three single-tenant industrial properties comprising an aggregate of 362,745 square feet of GLA. The Edmonton Portfolio is 100% leased to high quality national and regional tenants with a weighted average remaining lease term of approximately 5.94 years. The purchase price for the Edmonton Portfolio is $30.4 million, representing a 6.74% going-in capitalization rate. Assuming the acquisition is completed, at closing there will be an adjustment to the purchase price of $2.2 million in favour of PIRET to account for capital repairs. The adjustment will result in a net purchase price of $28.2 million for the Edmonton Portfolio.
The East-West Portfolio consists of six single-tenant industrial properties comprising an aggregate of 387,150 square feet of GLA. The East-West Portfolio will be 100% leased to the vendor, a high quality national tenant, with a weighted average remaining lease term of 20 years. The purchase price for the East-West Portfolio is $30.0 million, representing a 8.33% going-in capitalization rate. The acquisition agreement contemplates that $3 million of the purchase price will be paid in Units of PIRET, which Units will be held as security to secure certain lease obligations of the vendor.
The East Portfolio consists of two single-tenant industrial properties comprising an aggregate of 231,545 square feet of GLA. The East Portfolio is 100% leased to a high quality national tenant with a weighted average remaining lease term of approximately 11.3 years. The purchase price for the East Portfolio is $18.0 million, representing a 7.02% going-in capitalization rate.
The Halton Property consists of one single-tenant industrial property comprising 123,750 square feet of GLA. The Halton Property is 100% leased to a high quality national tenant with a remaining lease term of approximately 4.93 years. The purchase price for the Halton Property is $9.8 million, representing a 6.63% going-in capitalization rate.
The Balzac Property consists of one multi-tenant industrial property comprising 58,772 square feet of GLA. The Balzac Property is 100% leased to a mix of quality regional tenants with a remaining weighted average lease term of approximately 3.1 years. The purchase price for the Balzac Property is $8.9 million, representing a 7.07% going-in capitalization rate.
Consistent with PIRET's past practices and in the normal course, PIRET engages in ongoing discussions with respect to possible acquisitions and has entered into acquisition agreements in respect of the properties described above, which are subject to a number of conditions. There can be no assurance that any of these acquisitions will be completed on the terms of such agreement or at all. PIRET continues to actively pursue acquisition and investment opportunities.
In aggregate, PIRET intends to place and assume new and existing mortgage financing in respect of the Acquisitions in the aggregate of approximately 77.7 million, bearing an anticipated weighted average interest rate of 3.90%.
Darren Latoski, Co-CEO of PIRET, said "PIRET is continuing to take advantage of our well established pipeline of acquisition opportunities across Canada. We are pleased to have identified these high quality, well tenanted industrial properties in key markets which we can acquire on an accretive basis."
About Pure Industrial Real Estate Trust
PIRET is an unincorporated, open-ended investment trust established for the purposes of acquiring, owning and operating a diversified portfolio of income-producing industrial properties in primary markets across Canada. PIRET focuses exclusively on investing in industrial properties and is the largest internally managed publicly traded REIT in Canada that offers investors exclusive exposure to Canada's industrial asset class.
Certain statements contained in this news release may constitute forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "plan", "expect", "may", "will", "intend", "should", and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Forward looking statements in this news release include the following: (i) the Financing is expected to close on or about February 12, 2013 and is subject to regulatory approval; and (ii) in aggregate, PIRET intends to place and assume new and existing mortgage financing in respect of the Acquisitions in the aggregate of approximately $77.7 million, bearing an anticipated weighted average interest rate of 3.90%.
The forward-looking statements contained in this news release are based on certain key expectations and assumptions made by PIRET, including: expectations and assumptions concerning receipt of required regulatory approvals and the satisfaction of other conditions to the completion of and use of proceeds from the Financing.
Although PIRET believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because PIRET can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the failure to obtain necessary regulatory approvals or satisfy the conditions to closing the Financing or mortgage financings, competitive factors in the industries in which PIRET operates, prevailing economic conditions, and other factors, many of which are beyond the control of PIRET.
The forward-looking statements contained in this news release represent PIRET's expectations as of the date hereof, and are subject to change after such date. PIRET disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required under applicable securities regulations.
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Director of Investor Relations