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TORONTO, Dec. 23, 2013 /CNW/ - FAM Real Estate Investment Trust
(TSX: F.UN) (TSX: F.WT) ("FAM REIT" or the "REIT") has acquired a
30,268 square foot office building in Winnipeg, MB for $4.0 million,
before closing costs from Huntingdon Capital Corp (HNT:TSX, HNT.DB:
TSX and HNT.WT:TSX) ("Huntingdon"). FAM REIT also announces that it has
entered into a firm contract with a third party to dispose of Humboldt
Mall, a 106,108 square foot retail property, in Humboldt, SK for $1.85
million, before closing costs.
Shant Poladian, Chief Executive Officer of FAM REIT, stated, "Throughout
2013, we undertook multiple initiatives to position FAM REIT for
long-term cyclical durability. We expanded our primary market presence
through several high quality acquisitions, reduced leverage, enhanced
liquidity and lengthened the term to maturity of our mortgage debt.
While today's announced transactions are small, they will increase our
overall liquidity from approximately $12 million to $17 million, and
reduce our leverage ratio by 100 bps to approximately 52.5%. In an
environment of anticipated rising long-term interest rates and capital
markets uncertainty for REITs, we believe FAM REIT is on sound
Acquisition of 1700 Ellice Avenue, Winnipeg, MB
On December 12, 2013, FAM REIT's Independent Trustees unanimously
approved the acquisition of a 30,268 sf multi-tenant office property
located at 1700 Ellice Avenue, Winnipeg, MB, from Huntingdon for $4.0
million, before closing adjustments. Closing was December 20, 2013.
The multi-tenant property is 100% leased with a weighted average
remaining lease term of 3.7 years. The $4.0 million purchase price
represents a going-in capitalization rate of 8.4%, after taking into
account a normalized 7.5% vacancy allowance.
The purchase price was settled through the issuance of 466,094 Class B
LP units, at a price of $8.58 per unit, representing the 20 day volume
weighted average price for FAM REIT units as of market close on
December 11, 2013. The Class B LP units are economically equivalent
to, and exchangeable on a one for one basis for, FAM REIT trust units.
1700 Ellice Avenue is a natural tuck-in acquisition for FAM REIT, as it
completes the integration of Century Business Park, which includes 1680
Ellice Avenue, and 585 Century Street, both of which are currently
owned by FAM REIT. The property is well-located in the St. James node,
within close proximity to the Trans-Canada Highway and Winnipeg's James
Armstrong Richardson International Airport.
FAM REIT has also obtained lender approval to add 1700 Ellice Avenue and
585 Century Street as first charge collateral to its revolving credit
facility. Adding these properties to the collateral pool will result in
an increase to the revolver's borrowing capacity to $17 million.
The acquisition of 1700 Ellice Avenue constitutes a "related party
transaction" under Multilateral Instrument 61-101 - Protection of
Minority Security Holders in Special Transactions ("MI 61-101″). The
transaction is exempt from the formal valuation and minority approval
requirements of MI 61-101 pursuant to the exemptions found in sections
5.5(a) and 5.7(1)(a) of MI 61-101 on the basis that the fair market
value of the total amount of the acquisition does not exceed 25% of FAM
REIT's market capitalization.
Disposition of Humboldt Mall, Humboldt, SK
On December 10, 2013, a third-party purchaser waived conditions on the
purchase of Humboldt Mall, a 106,108 square foot retail property,
located at 1919A 8th Avenue in Humboldt, Saskatchewan. The transaction
is expected to close on December 30, 2013.
The sale price for Humboldt Mall is $1.85 million, before closing costs
and approximates FAM REIT's purchase price at the time of its December
2012 initial public offering. The transaction will be fully satisfied
on a cash basis.
As of September 30, 2013, occupancy of Humboldt Mall was 82.9%. The
disposition is consistent with FAM REIT's strategy of owning a
diversified commercial property portfolio primarily across Canada's
large population centres.
About FAM Real Estate Investment Trust
The REIT is a diversified commercial real estate investment trust
focused on owning and acquiring strategically well-located office,
industrial and retail real estate located primarily across Canada's
large population centres.
This press release contains forward-looking information within the
meaning of applicable securities legislation, including statements
regarding the REIT's financial position, which reflects the REIT's
current expectations regarding future events. Forward-looking
information is based on a number of assumptions and is subject to a
number of risks and uncertainties, including capital market and
interest rate volatility, many of which are beyond the REIT's control,
that could cause actual results and events to differ materially from
those that are disclosed in or implied by such forward-looking
information. These forward-looking statements are made as of the date
of this press release and, except as expressly required by applicable
law, the REIT assumes no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise.
SOURCE: FAM Real Estate Investment Trust
For further information:
Shant Poladian, Chief Executive Officer
FAM Real Estate Investment Trust
Telephone: (647) 256-5002