Artis REIT announces acquisition of $68.3 million of Western Canadian commercial property and new acquisition line of credit



    WINNIPEG, Aug. 17 /CNW/ - Artis Real Estate Investment Trust ("Artis" or
the "REIT") announced today that it has entered into agreements with respect
to the acquisition of properties (the "Proposed Acquisitions") for a total
purchase price of $68.3 million. The proposed acquisitions are located in
Manitoba, Alberta and B.C.
    The total purchase price represents a weighted-average going-in
un-levered cash return ("Capitalization Rate") of 7.3%. The proposed
acquisitions are scheduled to close in the third quarter of 2007. The proposed
acquisitions include: (i) a 38% interest in the Commodity Exchange
Tower/Winnipeg Square office and retail complex in Winnipeg, Manitoba; (ii)
the Pepco Industrial Building in Nisku, Alberta; and (iii) the Delta Shoppers
Mall in Delta, B.C. The purchase prices for the proposed acquisitions will be
satisfied by a combination of cash on hand and committed mortgage financing.
    Artis also announced today the signing of a conditional agreement for a
line of credit of approximately $75 million. The facility is primarily to be
used for future acquisitions.
    "Deal flow continues to be strong in our target markets", said Armin
Martens, CEO of Artis REIT. "These acquisitions, at a going-in cash
capitalization rate of 7.3%, are immediately accretive to our unitholders. Our
ability to secure and execute on future acquisitions will also be
significantly improved by the availability of additional short-term financing,
once the line of credit is in place."

    
                            Proposed Acquisitions
    -------------------------------------------------------------------------
                                          Gross
                                         Leasable
               Property                    Area                  Year Built/
    Property     Type      Location    (000's sq.ft.) Occupancy  Redeveloped
    -------------------------------------------------------------------------
    Winnipeg    Retail    Winnipeg, MB      600         94.0%           1979
     Square/    Class A
     Commodity  Office
     Exchange
     Tower(1)

    Delta       Retail       Delta, BC       75         97.3%      1972/2004
     Shoppers
     Mall(2)

    Pepco       Industrial    Nisku, AB      20        100.0%      1977/2007
     Industrial
     Building(2)
    -------------------------------------------------------------------------
    Total                                   695         95.1%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Unconditional agreement to acquire a 38% interest
    (2) Unconditional purchase and sale agreement
    

    "Artis has been successful in securing attractive financing for this
round of acquisitions. The weighted average term to maturity on the new and
assumed financing of $44.2 million is 7.6 years. The weighted average rate on
the financing is 5.5% (35% locked in, with the remained based on committed
spreads to current bond yields)," said Martens. "Overall, our interest rate
risk remains low, with less than 1% of our current mortgage obligations coming
due in 2007 and only 2.1% falling due in 2008. Across the portfolio, our
weighted average nominal interest rate is 5.4% with an overall weighted
average term to maturity of over 6 years".

    Winnipeg Square/Commodity Exchange Tower

    Artis has entered into an unconditional agreement with Crown Realty
Partners of Toronto (as the managing partner) to purchase a 38% interest in
the 600,000 square foot Winnipeg Square/Commodity Exchange Tower complex. The
Commodity Exchange Tower is a 32 storey, Class A office building, with an
outstanding roster of tenants including three of the four largest law firms in
the city and two major accounting firms. The Shops of Winnipeg Square is the
lower level retail component, connected to the city's skywalk system, and has
food services (such as Starbuck's, A&W, McDonald's) and other retails shops
(including Shoppers Drug Mart). The property has access to the 978 underground
parking stalls in the Winnipeg Square parkade (owned and operated by the City
of Winnipeg).

    Pepco Industrial Building

    Artis has entered into an unconditional agreement to purchase the Pepco
Industrial Building, a 20,000 square foot property located in the Nisku
Business Park. The Nisku business park is next to Highway 2, a major artery
serving the province of Alberta. The single building property is tenanted by
Pepco Pipe Services, incorporated 1981, serving the oil and gas industry. This
is a 10-year lease expiring in 2017, with a 13% rental increase scheduled for
2012.

    Delta Shoppers Mall

    Artis has entered into an unconditional agreement to purchase the Delta
Shoppers Mall, a retail complex located on the Scott Road Commercial Corridor,
in Delta, BC, shadow-anchored by a new format Real Canadian Superstore. The
property was substantially re-developed into a 74,537 square foot
five-building strip mall in 2004. Delta Shoppers Mall is currently 97.3%
leased, approximately 50% by national tenants such as Jysk, A&B Sound and TD
Canada Trust. Management estimates that in-place rents are approximately 25%
below current market rents.

    Update on Previously Announced Acquisitions

    Artis anticipates that the acquisition of the Leon's Building in Nanaimo,
BC, (previously announced as part of the Nanaimo portfolio in a press release
dated June 12, 2007), will close in the fourth quarter of 2007. The Powell
River Portfolio, also announced in the press release dated June 12, 2007, is
no longer being pursued.

    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 proposed acquisitions, Artis will have acquired approximately $900 million
of commercial property; approximately 20.8% in Manitoba, 9.6% in Saskatchewan,
64.0% in Alberta, and 5.6% in B.C. The portfolio will consist of 57
properties, comprising approximately 4.8 million square feet of leasable area
(33.6% retail, 53.0% office and 13.4% 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
www.artisreit.com.

    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 of the REIT, Mr. Jim Green, Chief Financial Officer, or Ms.
Kirsty Stevens, VP - Investor Relations, of the REIT at (204) 947-1200.


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