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TORONTO, March 17, 2017 /CNW/ - Automotive Properties Real Estate Investment Trust (TSX: APR.UN) (the "REIT") today announced that it has entered into an agreement to purchase the Go Mazda dealership property ("the Property") in Edmonton, Alberta from Go Auto for $8.0 million. The 17,150 square-foot, full-service dealership facility is located on 2.27 acres at 9704 and 9710 35th Avenue NW in Edmonton, one of the city's busiest automotive retail corridors. The addition of the Property is expected to be immediately accretive to the REIT's Adjusted Funds from Operations ("AFFO") on a per unit basis.
This transaction represents the REIT's second dealership property acquisition from Go Auto, one of Canada's largest owner / operators of automotive dealership properties. In December 2015, the REIT acquired the Porsche Centre and Jaguar Land Rover Edmonton dealership property from Go Auto for approximately $23 million. Go Mazda is an established dealership that reopened last month following a major renovation and rebranding. Upon closing of the acquisition, Go Mazda, owned by Go Auto, will be the operating tenant and will enter into a 17-year, triple-net lease with the REIT, with four extension terms of five years each. The lease includes a 1% annual contractual increase after year one. The Go Mazda lease will be indemnified by Go Auto.
"The acquisition of Go Mazda increases our scale in the rebounding Alberta market and strengthens our business relationship with Go Auto, which underscores our focus on providing a real estate monetization solution to a wide range of leading automotive dealership owners," said Milton Lamb, President and CEO of Automotive Properties REIT.
The REIT intends to satisfy the purchase price of the Property through cash on hand. The REIT has completed its diligence in connection with this acquisition and closing is expected to occur by the end of March 2017, subject to customary closing conditions.
About Automotive Properties REIT
Automotive Properties REIT is an unincorporated, open-ended real estate investment trust focused on owning and acquiring primarily income-producing automotive dealership properties located in Canada. The REIT's portfolio of 32 income producing commercial properties represents approximately 1.3 million square feet of gross leasable area in Ontario, Saskatchewan, Alberta, British Columbia and Québec. Automotive Properties REIT is the only public vehicle in Canada focused on consolidating automotive dealership real estate properties. For more information, please visit: www.automotivepropertiesreit.ca.
This news release contains forward-looking information within the meaning of applicable securities legislation, which reflects the REIT's current expectations regarding future events and in some cases can be identified by such terms as "will" and "expected". Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, 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. Such risks and uncertainties include, but are not limited to, the factors discussed under "Risks and Uncertainties" in the REIT's management's discussion and analysis most recently filed on SEDAR (www.sedar.com) and in the REIT's current annual information form which is also available on SEDAR. The REIT does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law. This forward-looking information speaks as of the date of this news release.
Non-IFRS Financial Measure
This news release contains a financial measure which is not defined under IFRS and may not be comparable to similar measures presented by other real estate investment trusts or enterprises. AFFO is a key measure of performance used by real estate businesses. This measure is not defined by IFRS and does not have a standardized meaning prescribed by IFRS, and therefore should not be construed as an alternative to net income or cash flow from operating activities calculated in accordance with IFRS. The REIT believes that AFFO is an important measure of economic performance and is indicative of the REIT's ability to pay distributions. The IFRS measurement most directly comparable to AFFO is net income. Please refer to the REIT's MD&A for further discussion of this non-IFRS financial measure.
SOURCE Automotive Properties Real Estate Investment Trust
For further information: Bruce Wigle, Investor Relations, Bay Street Communications, Tel: 647-496-7856; Milton Lamb, President & CEO, Automotive Properties REIT, Tel: (647) 789-2445; Andrew Kalra, CFO & Corporate Secretary, Automotive Properties REIT, Tel: (647) 789-2446