TORONTO, June 18, 2014 /CNW/ - WPT Industrial Real Estate Investment Trust (the "REIT") (TSX: WIR.U) announced today that it has completed the previously announced acquisition of an industrial property located near Louisville, Kentucky for a purchase price of approximately US$45.4 million (exclusive of closing and transaction costs). The REIT, through WPT Industrial, LP (the "Partnership") (the REIT's operating subsidiary), indirectly acquired the property from Welsh Property Trust, LLC ("Welsh"), the external asset and property manager of the REIT.
The property, located in Shepherdsville, Kentucky, is a multi-tenant distribution building, totaling 936,000 square feet of gross leasable area. The property is currently 100% leased to two tenants, Clorox Co. and a major, publicly traded online retailer, with leases expiring in July 2018 and July 2019, respectively.
With the completion of this transaction, the REIT's portfolio now consists of 39 industrial properties and two office properties totaling approximately 12.6 million square feet of gross leaseable area.
The purchase price for the property (exclusive of closing and transaction costs) was satisfied by: (i) the issuance of approximately US$20.4 million in Class B partnership units of the Partnership ("Class B Units") (being 2,165,605 Class B Units) to Welsh; and (ii) US$25 million in cash, funded by an 8-year, fixed-rate mortgage loan from CMFG Life Insurance Company that was placed on the property at closing of the acquisition, which has a fixed interest rate of 3.77% per annum and is secured by a mortgage on the property. No acquisition fee was payable to Welsh, as external asset manager of the REIT, in connection with the acquisition of the property because the property was owned by Welsh at the time of the REIT's initial public offering.
In connection with closing of the acquisition, the parties amended the contribution agreement for the acquisition to, among other things, provide the REIT with the right to elect to issue the promissory note in lieu of paying the cash consideration at closing. A copy of the amended and restated contribution agreement for the acquisition will be filed by the REIT under its profile on the SEDAR website at www.sedar.com.
The number of Class B Units issued to Welsh in connection with the acquisition was determined by applying a price of US$9.42 per Class B Unit, which is the 20-trading day volume-weighted average price for the trust units of the REIT ("Units") on the Toronto Stock Exchange for the period immediately prior to April 14, 2014 (the day the transaction was announced by the REIT). The closing price of the Units on the Toronto Stock Exchange on April 11, 2014 (the last trading day before the transaction was announced) was US$9.60.
Welsh now directly and indirectly owns 752,700 Units and 15,225,314 Class B Units, representing an approximate 54.3% effective interest in the REIT (assuming all Class B Units are redeemed for Units, but excluding options and deferred trust units outstanding under the REIT's equity compensation plans). Class B Units are economically equivalent to Units and redeemable by the holder thereof for cash or Units (on a one-for-one basis subject to customary anti-dilution adjustments), as determined by the general partner of the Partnership in its sole discretion.
About WPT Industrial Real Estate Investment Trust
WPT Industrial Real Estate Investment Trust is an unincorporated, open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Ontario. The REIT has been formed to own and operate an institutional-quality portfolio of primarily industrial properties located in the United States, with a particular focus on warehouse and distribution industrial real estate. WPT Industrial, LP (the REIT's operating subsidiary) indirectly owns a portfolio of properties consisting of approximately 12.6 million square feet of gross leasable area, comprised of 39 industrial properties and two office properties located in 12 states within the United States.
This press release contains "forward-looking information" as defined under applicable Canadian securities law ("forward-looking information" or "forward-looking statements") which reflect management's expectations regarding objectives, plans, goals, strategies, future growth, results of operations, performance, business prospects and opportunities of the REIT. The words "plans", "expects", "does not expect", "scheduled", "estimates", "intends", "anticipates", "does not anticipate", "projects", "believes" or variations of such words and phrases or statements to the effect that certain actions, events or results "may", "will", "could", "would", "might", "occur", "be achieved" or "continue" and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable by management of the REIT as of the date of this press release, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The REIT's estimates, beliefs and assumptions, which may prove to be incorrect, include the various assumptions set forth herein, including, but not limited to, the REIT's and the property's future growth potential, results of operations, future prospects and opportunities, the demographic and industry trends remaining unchanged, no change in legislative or regulatory matters, future levels of indebtedness, the tax laws as currently in effect remaining unchanged, the continual availability of capital, the current economic conditions remaining unchanged, and continued positive net absorption and declining vacancy rates in the markets in which the REIT's properties are located.
When relying on forward-looking statements to make decisions, the REIT cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not the times at or by which such performance or results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the factors discussed under "Risk Factors" in the REIT's annual information form for the year ended December 31, 2013, which is available under the REIT's profile on SEDAR at www.sedar.com. These forward-looking statements are made as of the date of this press release and, except as expressly required by applicable law, the REIT assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
SOURCE: WPT Industrial Real Estate Investment Trust
For further information: Matt Cimino, General Counsel & Secretary, WPT Industrial Real Estate Investment Trust, Tel: (952) 837-3083, Fax: (952) 541-8083