TORONTO, Nov. 25, 2015 /CNW/ - Summit Industrial Income REIT ("Summit" or the "REIT") (TSX: SMU.UN) announced today that it has entered into an agreement to acquire a 50% interest in a portfolio of three properties well-located in the Greater Montreal Region. The portfolio consists of a new 58,470 square foot single tenant light industrial building leased for a term of 20 years, a 100% occupied 46,132 square foot multi-tenant light industrial building, and a new 100% occupied 44,122 square foot suburban office building. The average lease term of the portfolio is in excess of 10 years with contractual rent increases that equate to 1.5% per annum.
Summit will be acquiring its 50% interest in the portfolio from the Montoni Group, which will continue to own the remaining 50% interest and manage the properties. The purchase price for Summit's 50% interest will be $12.0 million, financed with cash and the assumption of $3.74 million in two existing mortgages on two of the properties being acquired with a weighted average term to maturity of 2.1 years bearing an interest rate of 3.62%, and the placing of long term financing on the third property prior to closing. The acquisition price for the three properties will generate a capitalization rate of approximately 6.5%. Closing on the acquisition for two of the properties is expected on or before December 31, 2015 with the third property expected to close in early 2016.
"This acquisition represents our second transaction with the Montoni Group, one of Montreal's leading property developers. Once completed, we will own a 50% interest in approximately 800,000 square feet of high-quality Montreal assets in partnership with Montoni, and we look to further expand our property portfolio with them going forward," commented Paul Dykeman, Chief Executive Officer.
Summit Industrial Income REIT is an unincorporated open-end trust focused on growing and managing a portfolio of light industrial properties across Canada. Summit's units are listed on the TSX 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's property portfolio. The forward-looking statements and information are based on certain key expectations and assumptions made by Summit, including general economic conditions. Although Summit 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 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 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 undertakes 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.
SOURCE Summit Industrial Income REIT
For further information: Paul Dykeman, CEO at (902) 405-8813, firstname.lastname@example.org