WINNIPEG, March 29, 2012 /CNW/ - Artis Real Estate Investment Trust (TSX: AX.UN) ("Artis" or the "REIT") announced today that it has entered into new unconditional agreements with respect to the acquisition of a $101.0 million office property in Calgary, Alberta and the acquisition of an additional 25% interest in a retail property in West Kelowna, British Columbia for $14.2 million.
Trimac House is a 238,419 square foot 23-storey Class A office building located in downtown Calgary, Alberta. Trimac House comes complete with 3-storey underground heated parkade, providing a parking ratio of 1 stall per 1,800 square feet, and is also located in close proximity to LRT and Plus 15 connections. The property is 98.6% leased to a high quality roster of tenants, including CGI Group, Syncrude, First National Financial, and Trimac Transportation. Current in-place rent rates are on average less than $24 per square foot; management estimates that market rents for Trimac House are $28-$30 per square foot. The purchase price of $101.0 million, representing a going-in capitalization rate of 6.7%, is expected to be financed with cash on hand and from the proceeds of a new $60.6 million five-year mortgage bearing interest at a rate of 3.57% per annum. The acquisition is anticipated to close on or about April 30, 2012.
Artis has entered into an unconditional agreement to acquire an additional 25% interest in the property known as Westbank Hub Centre North. Artis currently owns a 50% interest in this Class A retail property, which is a 249,724 square foot unenclosed retail shopping centre located in West Kelowna, British Columbia. The property is 98.3% occupied by a mix of national and regional tenants, including Walmart, London Drugs, HSBC, and CIBC. An additional 8,616 square feet of leasable area has been pre-leased to new national tenants; development is underway with completion anticipated in fall of 2012. The additional 25% interest in the Westbank Hub Centre North property will be acquired in two phases, with the first closing taking place on April 16, 2012 and the second closing taking place once the developments are complete, for a purchase price of $14.2 million, representing a going-in capitalization rate of 6.3%. The purchase is expected to be financed by way of an additional 25% interest in existing mortgage financing on the property, plus a 75% interest in upward financing expected to be in place at the time of closing and with cash on hand.
Previously Announced Unconditional Agreements:
|Property||Location||Asset Class|| GLA
|Winnipeg Retail Property||Winnipeg, MB||Retail||100,875||96%||April 9, 2012|
|Crowfoot Corner||Calgary, AB||Retail||50,965||100%||April 30, 2012|
|Centrepoint (1)||Winnipeg, MB||Office/Retail||130,375|| 60%
(1) Artis has entered into a joint venture agreement for the development of this property.
The Winnipeg Retail Property is being acquired for a purchase price of $32.0 million, which represents a going-in capitalization rate of 7.2%. The purchase price is expected to be financed from cash on hand and from the proceeds of a new $20.9 million 5-year mortgage bearing interest at an anticipated rate of 3.57% per annum, based on today's bond rates.
Crowfoot Corner is being acquired for a purchase price of $35.5 million, which represents a going-in capitalization rate of 6.4%. The purchase price is expected to be financed from cash on hand and from the proceeds of a new $19.5 million 5-year mortgage bearing interest at a rate of 3.25% per annum.
Artis has also committed to contribute up to $10.0 million in capital to the Centrepoint project during the development period, which is anticipated to start this spring and complete in mid-2013. Artis owns a 50% interest in this $70.0 million project.
2012 Closed Acquisitions:
On January 31, 2012, Artis acquired the North 48 Commercial Complex for $18.4 million, which represented an average capitalization rate of 7.0%. The purchase price was financed with cash on hand.
On February 24, 2012, Artis acquired the Aluma Systems Building for $17.5 million, which represented a going-in capitalization rate of approximately 7.6%. The purchase price was financed with cash on hand.
On March 29, 2012, Artis acquired the GSA Phoenix Professional Office Building for US$75.0 million, which represented a going-in capitalization rate of approximately 7.5%. The purchase price was financed with US$68.5 million of new 20-year mortgage financing bearing interest at a fixed rate of 4.67% per annum and from cash on hand.
Artis is a diversified Canadian real estate investment trust investing in office, industrial and retail properties. Since 2004, Artis has executed an aggressive but disciplined growth strategy, building a portfolio of commercial properties in Canada and the United States, with a major focus on Western Canada. Artis' commercial property comprises nearly 17.3 million square feet of leasable area in 166 properties. Leasable area by asset class is approximately 21.3% retail, 37.6% office and 41.1% industrial. The portfolio is located 9.3% in British Columbia, 29.3% in Alberta, 5.8% in Saskatchewan, 20.1% in Manitoba, 11.5% in Ontario and 24.0% in the U.S.
The Toronto Stock Exchange does not accept responsibility for the adequacy or accuracy of this press release.
For further information:
Mr. Armin Martens, President and Chief Executive Officer,
Mr. Jim Green, Chief Financial Officer or Ms. Kirsty Stevens, Chief Administrative Officer