Artis closes on $177.4 million of properties in Alberta and Manitoba

    WINNIPEG, Dec. 4 /CNW/ - Artis Real Estate Investment Trust ("Artis" or
the "REIT") confirmed today that $177.4 million of previously announced
acquisitions have now closed. Particulars of the acquisitions are as follows:

                                              (000's  Purchase
                     Property                 square   Price
    Property           Type      Location      feet)  ($000's)     Closed
    Glenmore          Office    Calgary, AB      58    $12,000    November 9,
    Commerce Court                                                      2007

    ADA Industrial  Industrial  Winnipeg, MB    950    $41,500   November 15,
    Portfolio                                                           2007

    Fort McMurray/    Retail   Fort McMurray/   268    $76,700   November 30,
    Edmonton                    Edmonton, AB                            2007

    Bricks Centre     Retail   Grande Prairie,   46    $11,400   November 30,
                                    AB                                  2007

    Paramount         Office    Calgary, AB      68    $35,750    December 3,
    Building                                                            2007
    Total                                     1,390   $177,350

    These properties were acquired at a weighted average year one going-in
capitalization rate ("capitalization rate") of 7.0%. The purchase prices were
satisfied with cash on hand and from the proceeds of $88.3 million of new and
assumed mortgage and vendor take-back financing. In addition, the REIT issued
a seven year $20 million convertible debenture (the "Series D Convertible
Debenture") bearing interest at a rate of 5.0% per annum in connection with
the Fort McMurray/Edmonton Portfolio acquisition. The Series D Convertible
Debenture is convertible at $17.75, after November 30, 2009. Altogether, Artis
secured $108.3 million of financing with respect to the properties, bearing
interest at a weighted average interest rate of 5.38% per annum.
    "At the capitalization rates and excellent financing rates achieved,
these acquisitions are immediately accretive to our Unitholders", said Armin
Martens, CEO of the REIT. "As well, the Fort McMurray/Edmonton retail
portfolio has an outstanding embedded growth profile, with in-place rental
rates estimated to be 27% below current market rents. We believe this is an
excellent investment for our Unitholders; Fort McMurray remains a strong
landlord's market, and fundamentals in Edmonton, Alberta's capital city, are
strong. In addition, we remain well positioned to pursue additional accretive
investments in 2008, as our $75 million acquisition line of credit remains
fully untapped."

    Glenmore Commerce Court

    Glenmore Commerce Court is a 100% occupied two-story suburban office
property located on Glenmore Trail in southeast Calgary. The property includes
91 underground and 85 surface parking stalls, providing an excellent parking
ratio of 3 stalls per 1,000 square feet of leasable area. With in-place rents
estimated to be 33% below market, management anticipates significant upside
potential as leases roll over in this property.

    ADA Industrial Portfolio

    The ADA Industrial Portfolio is comprised of 16 industrial properties,
aggregating approximately 950,000 square feet of leasable area. The portfolio
is currently 97.9% occupied by a variety of local, national, international and
government entities. Average in-place rent rates are just $3.75 per square
foot and management estimates that there is excellent upside potential in the
near term as below market leases are rolled over at market rents.

    Fort McMurray/Edmonton Retail Portfolio

    This portfolio consists of seven retail properties aggregating nearly
270,000 square feet of leasable area. Six properties are located in Fort
McMurray, Alberta, in the heart of the Athabasca Oil Sands. The Athabasca Oil
Sands is one of the largest deposits in the world, which has led to phenomenal
growth in the region. The population of Fort McMurray has grown by 77% in the
last six years to reach 65,000 people in 2006. Over $30 billion is anticipated
to be invested in the region's oil sands in the next five years, creating jobs
for an additional 17,000 people. Currently 43% of employees work in the oil
sands industry, with the remainder of the workforce employed in other
industries, including construction, forestry, health care, retail, and
tourism. With 65% of the population under the age of 40, Fort McMurray is one
of the youngest, fastest growing, and most dynamic cities in Canada. (Source:
R.M. of Wood Buffalo, Municipal Census 2006)
    The six Fort McMurray properties are primarily newer class "A" unenclosed
food anchored retail developments that together comprise over 163,000 square
feet of leasable area. The properties are 100% occupied, with over 60% of the
gross rental revenues derived from national or government tenancies. Key
tenants include IGA, Rogers Video, Bank of Nova Scotia, Moxie's Restaurant,
Tim Horton's, the Alberta Treasury Branch and Reitmans. In-place rents are
estimated to be 23% below market rates.
    As part of the portfolio, Artis also acquired North City Centre, a newly
developed Class A unenclosed retail shopping centre located in the heart of
Edmonton's well established 137th Street power retail corridor. North City
Centre comprises approximately 105,000 square feet of leasable area and is
100% occupied. Over 66% of the leasable area is occupied by national
retailers, such as Jysk, Staples, Old Navy and the Bank of Nova Scotia. The
average lease term to maturity is 6.5 years in the shopping centre.

    Brick Centre

    The Brick Centre is a two-building 46,000 square foot, newly constructed,
retail centre located in the Westgate/Gateway power centre node in Grande
Prairie, Alberta. Grande Prairie is the largest metropolitan centre in
Alberta's Peace River region and services a market area in excess of
200,000 people. The Westgate/Gateway power centre is the hub of Grande
Prairie's retail/commercial district and includes tenants such as Home Depot,
Wal-Mart, Future Shop, London Drugs and Staples. The Brick Centre is anchored
by The Brick and the Canadian Western Bank. The average lease term to maturity
is 13.4 years, with contractual rental increases.

    Paramount Building

    Paramount Building is a five-storey office tower located in the mid-west
core submarket of downtown Calgary. The property has 47 underground parking
stalls, providing an excellent ratio of 1 stall per 1,500 square feet of
leasable area. The Paramount Building's major tenant has signed a new 10-year
lease with a rental increase in year five.

    Artis is a growth-oriented real estate investment trust focused
exclusively on commercial properties located in primary and growing secondary
markets in western Canada, particularly in Alberta. The REIT's goal is to
provide Unitholders the opportunity to invest in high-quality western Canadian
office, retail and industrial properties, as well as to provide monthly cash
distributions that are stable, tax efficient, and growing over time.
    Including all of the completed and proposed acquisitions, Artis will own
approximately $1.1 billion of commercial property, comprising approximately
6.3 million square feet of leasable area in 84 properties. Leasable area will
be approximately 31.1% in Manitoba, 6.6% in Saskatchewan, 55.4% in Alberta,
and 6.9% in B.C.; by asset class the portfolio will be 31.4% retail, 43.3%
office and 25.3% industrial.
    The REIT's Distribution Reinvestment Plan ("DRIP") allows Unitholders to
have their monthly cash distributions used to purchase trust units without
incurring commission or brokerage fees, and receive bonus units equal to 4% of
their monthly cash distributions. More information can be obtained at

    This press release contains forward-looking statements. For this purpose,
any statements contained herein that are not statements of historical fact may
be deemed to be forward-looking statements. Without limiting the foregoing,
the words "expects", "anticipates", "intends", "estimates", "projects", and
similar expressions are intended to identify forward-looking statements. Artis
is subject to significant risks and uncertainties which may cause the actual
results, performance or achievements of the REIT to be materially different
from any future results, performance or achievements expressed or implied in
these forward-looking statements. Such risk factors include, but are not
limited to, risks associated with real property ownership, availability of
cash flow, general uninsured losses, future property acquisitions,
environmental matters, tax related matters, debt financing, unitholder
liability, potential conflicts of interest, potential dilution, reliance on
key personnel, changes in legislation and changes in the tax treatment of
trusts. Artis cannot assure investors that actual results will be consistent
with any forward-looking statements and Artis assumes no obligation to update
or revise such forward-looking statements to reflect actual events or new
circumstances. All forward-looking statements contained in this press release
are qualified by this cautionary statement.

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

For further information:

For further information: Mr. Armin Martens, President and Chief
Executive Officer, Mr. Jim Green, Chief Financial Officer, or Ms. Kirsty
Stevens, Senior Vice President - Investor Relations, (204) 947-1250

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