Artis announces $122.3 million of new acquisitions and closes "MAX at Kierland" for US$79.0 million

WINNIPEG, May 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 to acquire a $95.5 million portfolio of well-tenanted light industrial properties in Ontario's Greater Toronto Area (the "GTA"), as well as an 85% interest in a retail shopping complex, well-located in the heart of Whistler Village, British Columbia, for $26.8 million.

New Acquisitions

Artis will acquire the GTA Industrial Portfolio, which is a portfolio of 17 institutionally owned and managed light industrial buildings located throughout the GTA, totaling over 1.1 million square feet of leasable area. The properties are of good quality, with functional and well finished office and commercial components, clear ceiling heights of 18 to 28 feet and adequate truck docking and shipping facilities.  All properties are well located in established office and industrial parks, with excellent access to major roadways, most in good proximity to the Lester B. Pearson Airport.  The portfolio is 98% leased, with a diversified tenant mix and exposure to various markets.  Key tenants include The Harding Interactive Display Corporation, Dynaplas Ltd., Beckman Coulter Canada LP, McFadden's Hardwood and Sylvite Agri-Services; the largest tenant occupies less than 15.0% of the leasable area. The purchase price, at $86 per square foot, is well below replacement cost.  The GTA Industrial Portfolio will be acquired for $95.5 million, representing a going-in capitalization rate of 6.7%.  The purchase price is expected to be financed from cash on hand and by way of a new $52.5 million five-year mortgage bearing interest at a fixed rate estimated to be 3.01%.  The acquisition is anticipated to close on or about July 17, 2012.

Artis will also acquire an 85% interest in the retail component of the Hilton Whistler Resort and Spa.  The property is located in the heart of Whistler Village, on the popular Whistler Village Stroll and directly across from the Whistler/Blackcomb gondolas.  The property benefits from exceptional exposure to 2 million annual visitors, who collectively represent some $1 billion in tourism spending per annum.  The 39,510 square foot, three-story retail complex is tenanted with several national tenants including Guess, L'Occitane, and Rocky Mountain Chocolate Factory, as well as a number of long-term local tenants such as Summit Ski Ltd., who have been a tenant in the property for almost 25 years. The purchase price of $26.8 million for the 85% interest, which represents a going-in capitalization rate of 6.9%, is expected to be financed from cash on hand and by way of a new $17.4 million five-year mortgage bearing interest at a fixed rate estimated to be 3.75%.  The purchase price includes excess lands on the site, which provide an opportunity for future development.  The acquisition is anticipated to close on or about June 14, 2012.

"MAX at Kierland" in Scottsdale, Arizona

On May 25, 2012, Artis closed the previously announced acquisition of MAX at Kierland, a 258,312 square foot, six-storey Class A office tower located in Scottsdale, Arizona.  The property was constructed in 2008; it was the first building in North Scottsdale to obtain LEED Core and Shell certification, and is on track to receive a 99% Energy Star rating.  This property enjoys an exceptional parking ratio of 3.5 stalls per 1,000 square feet, and includes a three-level underground parking garage.  MAX at Kierland serves as the corporate and regional headquarters for several multi-national corporations including Universal Technical Institute (NYSE: UTI), APL, Limited (SXG: NOL), Willis of Arizona, Inc. and Ameriprise Financial.  The weighted-average lease term to maturity is 6.5 years.  The purchase price of US$79.0 million, which represented a going-in capitalization rate of 6.5%, was financed from cash.  Artis intends to place new mortgage financing on the property at a later date.

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 18.1 million square feet of leasable area in 170 properties. Leasable area by asset class is approximately 21.6% retail, 38.7% office and 39.7% industrial. The portfolio is located 9.2% in British Columbia, 29.6% in Alberta, 5.5% in Saskatchewan, 19.7% in Manitoba, 11.0% in Ontario and 25.0% in the U.S.

The Toronto Stock Exchange does not accept responsibility for the adequacy or accuracy of this press release.

Mr. Armin Martens, President and Chief Executive Officer
Mr. Jim Green, Chief Financial Officer
Ms. Kirsty Stevens, Chief Administrative Officer, 1.204.947.1250