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TORONTO, Aug. 22, 2016 /CNW/ - Automotive Properties Real Estate Investment Trust (TSX: APR.UN) (the "REIT") today announced that it has entered into an agreement with a third party vendor to purchase the Pfaff Audi dealership property, located in Vaughan, Ontario, part of the Greater Toronto Area. The purchase price of the property is approximately $17.2 million. The addition of this property is expected to be immediately accretive to the REIT's Adjusted Funds from Operations ("AFFO") on a per unit basis.
"Pfaff Audi will be a strong addition to the REIT," said Milton Lamb, President and CEO of Automotive Properties REIT. "Not only does it bring another great Audi property to our portfolio, it complements our strong presence in the key GTA market. This transaction is also noteworthy in that the tenant is the highly-regarded Pfaff Automotive Partners, one of Canada's leading automotive groups, thereby continuing to diversify our tenant base. Two-thirds of the capital we have deployed in our four acquisitions since our IPO have resulted in new, third-party tenancies."
Pfaff Audi, which was constructed in 2006, is a 69,000 square foot, full-service Audi dealership located on three acres at 9088 Jane Street just south of Rutherford Road, along a high-traffic corridor adjacent to Vaughan Mills, one of the largest shopping centres in Canada. The dealership is located within an area that is subject to the Vaughan Mills Centre Secondary Plan, adopted by the City of Vaughan Council in March 2014, which provides for a mix of high-density residential and high-quality retail development.
The REIT is assuming the current "triple net" lease on the property, which has a remaining initial term of approximately 4.75 years, following which there are two five-year renewal options available to the tenant, with renewal rents based on the greater of market rates and the then existing lease rate.
The REIT intends to satisfy the purchase price primarily through a new $14.6 million revolving credit facility with a major Canadian chartered bank, which will bear interest at the bankers acceptance rate plus 150 basis points. The balance of the purchase price is expected to be satisfied by cash on hand and/or a draw on the REIT's existing credit facility. The REIT has completed its diligence in connection with this acquisition and closing is expected to occur by early October 2016, 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 29 income producing commercial properties represents approximately 1.1 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: 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