TORONTO, Dec. 22 /CNW/ - Whiterock Real Estate Investment Trust (TSX:WRK.UN) announced today that it has completed the previously announced purchase of two high quality, primary market assets with long term leases to industry leaders Molson and Technicolor. In keeping with its accretive acquisition program, Whiterock has acquired an interest in a 225,000 square foot distribution centre in Montreal and an 87,105 square foot office building in downtown Toronto for $45.3 million. The in-place AFFO from the properties will add approximately $0.07 per unit to Whiterock's annualized AFFO.
Whiterock's partner on these acquisitions is Return on Innovation Capital Inc. ("ROI Capital"), an investment firm based in Toronto that specializes in private placement investments, including a focus on high quality properties with visible growing cash flow streams backed by solid covenants and longer term leases. With close to $600 million in assets, ROI Capital is one of the fastest growing investment firms in Canada.
Whiterock's 40% equity investment in the office building and 20% equity investment in the distribution centre, net of debt, totals approximately $5.0 million including closing costs, with an in-place AFFO return of approximately 15%. Whiterock used cash on hand to finance its investment in these properties.
Montreal Distribution Centre
The Molson Distribution Centre, located at 1900 Dickson Street on the island of Montreal, is a first class recently constructed 225,000 square foot built-to-suit distribution centre. Molson, which has investment grade credit, occupies 100% of the property and is one of Canada's oldest consumer brand names and North America's oldest beer brand. The distribution centre has 13 years remaining on a lease to Molson, periodic rent increases, further options to renew and is ideally located due to its close proximity to downtown Montreal and Molson's brewery and headquarters which have been located in Montreal since 1786. "We appreciated the professional approach Whiterock took to getting this off-market transaction completed. They were business-like in their due diligence review, delivered on their promises and their attitude allowed for a win/win scenario and successful completion of the transaction," said Joe Berger, a representative of the seller.
Downtown Toronto Office Building
49 Ontario Street is a 7-storey recently renovated contemporary 87,105 square foot office building in Downtown Toronto, with an approximately 24,000 square foot parking area. The building is 100% leased with an average remaining lease term of almost 8 years and has benefited from significant capital investment by its primary tenant, Technicolor Creative Services Canada Inc. It houses one of North America's premiere and technically sophisticated post production facilities. Technicolor's Creative Services division provides the widest array of end-to-end creative solutions in the world. Their state of the art services include: sound services, visual effects, post-production, digital preview screenings, digital intermediates, digital cinema and home entertainment mastering. "It's been a pleasure dealing with Whiterock. They are a professional group that conducts a thorough due diligence process, yet at the same time they met all deadlines, were equitable, reasonable and quite enjoyable to work with through this off-market deal, and we look forward to transacting with them on future deals," said Colin MacKellar of LaSalle Investment Management.
With the completion of these acquisitions, Whiterock's portfolio totals over 3.4 million square feet across 46 properties, with a weighted average lease term of approximately 8 years. 57% of the portfolio consists of government and investment grade tenants.
This news release contains "forward-looking statements" within the meaning of applicable securities legislation. These forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect" "estimate", "anticipate", "intend", "believe" or "continue", the negative forms thereof and similar expressions suggesting future outcomes or events. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. These statements are not guarantees of future events or performance and, by their nature, are based on Whiterock's estimates and assumptions, which are subject to known and unknown risks, uncertainties and other factors that may cause the actual events, results or prospects to be materially different from those expressed or implied herein. Readers are cautioned that a number of risks, uncertainties and other factors, including those discussed in Whiterock's various securities filings, including the section entitled "Risk Factors" in Whiterock's Annual Information Form which can be obtained at www.sedar.com, could cause actual events, results or prospects to differ materially from those stated or implied. These risks, uncertainties and other factors should be considered carefully, and a reader should not place undue reliance on forward-looking statements, as there can be no assurance that actual events, results or prospects will be consistent with such statements. In particular, but without limitation, there can be no assurance that Whiterock will be to able to increase its AFFO. Except as required by law, Whiterock does not undertake, and specifically disclaims, any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.
The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
SOURCE WHITEROCK REAL ESTATE INVESTMENT TRUST
For further information: For further information: www.whiterockreit.ca, Frank Bucys, CFO, (416) 907-4864; Jennifer Kosloski, (416) 979-3026