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TORONTO, Dec. 19, 2016 /CNW/ - Automotive Properties Real Estate Investment Trust (TSX: APR.UN) (the "REIT") today announced that it has entered into an agreement to purchase a Mercedes-Benz automotive dealership property in suburban Montreal, Quebec (the "Property"), for a purchase price of approximately $20.3 million. The Property is located on 3.7 acres at 4525 Boulevard Saint-Jean in Dollard-des-Ormeaux, Quebec. 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.
The 60,850 square-foot, full-service facility has just undergone a comprehensive renovation and expansion. Upon closing of the acquisition, Mercedes-Benz West Island, owned by the Dilawri Group, will be the operating tenant and will enter into a 17-year, triple-net lease with the REIT with an annual 1.5% fixed rent escalator.
The REIT intends to satisfy the purchase price through draws on its existing credit facilities. The REIT has completed its diligence in connection with this acquisition and closing is expected to occur prior to 2016 year-end, subject to customary closing conditions.
"We continue to execute on opportunities to enhance the REIT's major market and brand diversification," said Milton Lamb, President and CEO of Automotive Properties REIT. "We look forward to adding our third property in the Montreal market with the addition of this prestigious Mercedes-Benz dealership facility."
On a combined basis, the REIT's recently completed acquisition of the Audi and Volkswagen automotive dealership property located at 1905 and 1917 Boulevard Sir Wilfred Laurier in St. Bruno, Quebec, and the Mercedes-Benz automotive dealership property acquisition, represent a total purchase price of $34.6 million and a blended cap rate of approximately 7%.
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 31 income producing commercial properties represents approximately 1.2 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", "expected" and "intends". 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 ("MD&A") most recently filed on SEDAR (www.sedar.com). 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.
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: please contact: 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, 647-789-2446