Summit Industrial Income REIT Completes Financing on $52.7 Million in Acquisitions
TORONTO, Oct. 16, 2013 /CNW/ - Summit Industrial Income REIT ("Summit II" or the "REIT") (TSXV: SMU.UN) announced today that it had completed the financing on the previously-announced acquisition of six light industrial properties aggregating approximately 653,000 square feet of Gross Leaseable Area ("GLA") and one office property for a total purchase price of approximately $52.7 million. The purchases were financed with $26.5 million in new five-year mortgages with a weighted average interest rate of 3.85%, the assumption of a current $5.4 million mortgage, and the balance in cash. The average capitalization rate on the acquired properties is 7.22% with a weighted average remaining lease term of 5.1 years. Details of the specific property purchases can be found below.
"We continue to successfully execute our strategy of buying well-located, modern and attractive properties with strong cap rates, and with the favourable low-cost financing we have arranged for these acquisitions, they will be immediately and significantly accretive to our Adjusted Funds from Operations. In addition, we have further strengthened the size and scale of our portfolio and the REIT's presence in our key targeted regional markets," stated Paul Dykeman, CEO.
Effective August 29, 2013 the REIT completed the previously-announced purchase of three light industrial properties located in Brampton and Barrie, Ontario, and Laval, Quebec aggregating 446,379 square feet of GLA. The REIT paid approximately $37.4 million for the portfolio, financed by the assumption of an existing 2-year $5.4 million mortgage bearing an interest rate of 5.22%, a new five-year $16.4 million mortgage with an interest rate of 3.85%, and the balance in cash from the REIT's revolving credit facility. The purchase price resulted in a very strong 6.89% initial capitalization rate. All of the properties are close to highways, rail or other major transportation links, and all are 100% occupied by single credit-worthy national tenants with a weighted average remaining lease term of approximately 4.3 years.
Effective October 1, 2013 Summit II completed the previously-announced purchase of a portfolio of three light industrial properties and one fully-occupied office building located in Pointe Claire, Lasalle and St. Laurent in the Greater Montreal Region. The three industrial properties total 206,612 square feet of GLA with the office property adding 20,859 square feet. The REIT paid approximately $15.3 million for the portfolio, financed by a new five-year $10.1 million mortgage bearing an interest rate of 3.84% with the balance in cash from the REIT's revolving credit facility. The purchase price equates to a strong initial capitalization rate of 8.02%. The industrial properties are 93% occupied by national and strong regional tenants with a weighted average remaining lease term of 6.8 years. The office property is 100% occupied with a remaining lease term of 6.8 years. All of the properties are close to highways, rail and Montreal's major airport, and there is expansion potential available on land within the acquired portfolio.
About Summit II
Summit Industrial Income REIT is an unincorporated open-end trust focused on growing and managing a portfolio of light industrial properties across Canada. Summit II's units are listed on the TSX-V and trade under the symbol SMU.UN. For more information, please visit our web site at www.summitIIreit.com.
Caution Regarding Forward Looking Information
This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends", "goal" and similar expressions are intended to identify forward-looking information or statements. More particularly and without limitation, this news release contains forward looking statements and information concerning the goal to build Summit II's property portfolio. The forward-looking statements and information are based on certain key expectations and assumptions made by Summit II, including general economic conditions. Although Summit II believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward looking statements and information because Summit II can give no assurance that they will prove to be correct. By its nature, such forward-looking information is subject to various risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed. These risks and uncertainties include, but are not limited to, tenant risks, current economic environment, environmental matters, general insured and uninsured risks and Summit II being unable to obtain any required financing and approvals. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date hereof, and to not use such forward looking information for anything other than its intended purpose. Summit II undertake no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
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SOURCE Summit Industrial Income REITFor further information:
Paul Dykeman, CEO at (902) 405-8813