Automotive Properties REIT Agrees to Acquire Two Dealership Properties and a Vehicle Service Compound Facility in Edmonton for a Combined Purchase Price of $23.2 million
Nov 22, 2017, 17:00 ET
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TORONTO, Nov. 22, 2017 /CNW/ - Automotive Properties Real Estate Investment Trust (TSX: APR.UN) (the "REIT") today announced that it has entered into an agreement with a private third party (the "Vendor") to purchase a portfolio of three properties consisting of two automotive dealership properties and a vehicle service compound facility in Edmonton, Alberta: the Ericksen Infiniti dealership property, the Southtown Hyundai dealership property, and the Kentwood Ford vehicle service compound (the "Properties"). The combined purchase price for the Properties is approximately $23.2 million. The addition of the Properties to the REIT's portfolio is expected to be accretive to the REIT's Adjusted Funds from Operations ("AFFO") on a per unit basis.
The Properties have been leased by the Vendor to operating affiliates of Go Auto, one of Canada's largest owner/operators of automotive dealerships, since 2013. On closing, the REIT will assume the existing long-term triple-net leases on the Properties, each of which expires in June 2028 and include 10% rent escalations effective July 2018 and July 2023. The leases are indemnified by the parent company of Go Auto.
"This portfolio of properties will be a strong addition to the REIT and this transaction provides important strategic benefits. It expands our relationship with Go Auto, one of Canada's leading automotive retailers, which further diversifies our tenant base, it builds on our geographic diversification in major markets and the transaction is expected to be accretive to AFFO per unit," said Milton Lamb, President and CEO of Automotive Properties REIT.
The Ericksen Infiniti property includes a 25,550 square-foot dealership facility that was built in 2008, and is located on approximately 2.0 acres at 17616 111th Avenue NW, a busy commercial corridor with several other automotive dealerships, and has convenient access to major highways.
The Southtown Hyundai property includes a 13,357 square-foot dealership facility that was built in 2004, and is located on approximately 2.38 acres at 3603 99th Street NW, adjacent to the Strathcona industrial park along a busy commercial corridor with convenient access to major highways.
The Kentwood Ford vehicle service compound property is located on approximately 4.1 acres at 8603, 8703, 8735, and 8815 127th Avenue NW, adjacent to the Killarney residential neighbourhood and with convenient access to the Yellowhead highway, a major interprovincial expressway, and the Yellowhead railway corridor.
The REIT intends to satisfy the cumulative purchase price through existing credit facilities and cash on hand. The REIT has completed its due diligence in connection with these acquisitions and they are expected to close on or around December 1, 2017, subject to customary closing conditions.
About Automotive Properties REIT
Automotive Properties REIT is an unincorporated, open-ended real estate investment trust focused on owning and acquiring primarily income-producing automotive dealership properties located in Canada. Currently, the REIT's portfolio consists of 35 income producing commercial properties representing approximately 1.4 million square feet of gross leasable area in metropolitan markets across Ontario, Saskatchewan, Alberta, British Columbia and Québec. Automotive Properties REIT is the only public vehicle in Canada focused on consolidating automotive dealership real estate properties. For more information, please visit: www.automotivepropertiesreit.ca.
This news release contains forward-looking information within the meaning of applicable securities legislation, which reflects the REIT's current expectations regarding future events and in some cases can be identified by such terms as "will", "anticipates" and "expected". Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the REIT's control that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to, the factors discussed under "Risks and Uncertainties" in the REIT's management's discussion and analysis ("MD&A") most recently filed on SEDAR (www.sedar.com) and in the REIT's current annual information form which is also available on SEDAR. The REIT does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law. This forward-looking information speaks as of the date of this news release.
Non-IFRS Financial Measure
This news release contains a financial measure which is not defined under IFRS and may not be comparable to similar measures presented by other real estate investment trusts or enterprises. AFFO is a key measure of earnings performance used by real estate businesses. This measure is not defined by IFRS and does not have a standardized meaning prescribed by IFRS, and therefore should not be construed as an alternative to net income or cash flow from operating activities calculated in accordance with IFRS. The REIT believes that AFFO is an important measure of economic earnings performance and is indicative of the REIT's ability to pay distributions from earnings. The IFRS measurement most directly comparable to AFFO is net income. Please refer to the REIT's MD&A for further discussion of this non-IFRS financial measure.
SOURCE Automotive Properties Real Estate Investment Trust
For further information: Bruce Wigle, Investor Relations, Bay Street Communications, Tel: 647-496-7856; Milton Lamb, President & CEO, Automotive Properties REIT, Tel: (647) 789-2445; Andrew Kalra, CFO & Corporate Secretary, Automotive Properties REIT, Tel: (647) 789-2446
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