TORONTO, Oct. 11 /CNW/ - (TSXV: IS.UN) InStorage Real Estate Investment
Trust ("InStorage" or the "REIT") announced today the acquisition of
self-storage facilities in Airdrie Alberta, Milton Ontario and Vaughan Ontario
totaling $16.4 million and representing approximately 95,254 square feet of
net leaseable area together with excess lands for future expansion. In
addition, the REIT extended $6.7 million of mezzanine financing to two new
projects owned by InScotia Developments LP and a joint venture partner to be
developed into approximately 131,725 square feet of net leaseable area.
The Airdrie Storage Centre is well-located just outside the town of
Airdrie, Alberta, just west of Calgary. Consisting of 53,200 square feet of
net leaseable area, the acquired property includes 620 outdoor stalls for
storing recreational vehicles. The facility is 100% occupied with a waiting
list. The property included excess land on which a further 62,400 square feet
of new storage facilities will be developed. The self storage market in
Airdrie is very strong with high demand and restricted supply, benefiting from
its close proximity to the booming Calgary property market. InStorage acquired
100% of the property for $8.0 million. The transaction closed on August 15,
InStorage acquired Storage Spot located on Highway 25 just south of the
401 highway in Milton Ontario. The property consists of 27,775 square feet of
net leaseable area with excellent visibility in a fast growing commercial and
residential area. Opened in late 2006, occupancy is strong at 85% and growing.
The acquisition includes land on which an additional 47,650 square feet will
be developed with an estimated completion in January 2008. InStorage acquired
50% of the property, including the land for expansion, for approximately
$3.7 million. The transaction closed on August 31, 2007. The REIT has an
option to acquire the remaining 50% interest in the property once the
expansion is completed and achieves a stabilized occupancy of 85%.
The REIT also acquired the remaining 50% interest in its Mini Warehousing
facility situated on Weston Road in the fast-growing region of Vaughan,
Ontario north of Toronto. The property consists of 56,335 square feet of net
leaseable area as well as land for the development of an additional
22,100 square feet. Occupancy is currently at 80%. The expansion project,
scheduled for completion in June 2008, will feature new climate controlled
units that command higher rental prices in a market with few competitors.
InStorage paid $5.0 million to purchase the remaining 50% interest in the
property on October 5, 2007.
With the completion of these acquisitions, InStorage's total portfolio
now stands at approximately 2.95 million square feet of net leaseable area in
52 facilities well located in most major markets in Canada.
"We are continuing to build on our presence as the largest owner and
operator of self-storage facilities in Canada," commented T. James Tadeson,
Chief Executive Officer. "Each of these three properties represents solid
operating performance coupled with significant short term expansion
opportunity. Our acquisition and mezzanine lending programs are on target, the
roll-out of our branding, identification, and operating infrastructure
programs are progressing well, and we look forward to continuing our growth."
In addition, InStorage also announced today that it has committed
mezzanine loans totaling approximately $6.7 million to InScotia Developments
LP and its joint venture partners for the construction and lease-up of two new
self-storage facilities. The REIT will receive interest on these loans at an
annual rate of 9%:
- The first project will see the development of approximately
50,150 square feet of net leaseable area along Highway 26 at
MacDonald Road, the main access to the popular and fast-growing city
of Collingwood, Ontario. This new, state-of-the-art facility will
compete favourably with older existing facilities in the area.
Construction is estimated to be completed in July 2008. InStorage has
the option to acquire 100% of the property twelve months after
stabilization at 95% of appraised market value.
- The second project will be the development of 81,575 square feet of
net leaseable area on East Kent Avenue North in Vancouver, British
Columbia near the high traffic Knight Street bridge. The facility
will be situated in an established industrial area and close to
significant residential and commercial development. Construction is
scheduled to be completed in July 2008. InStorage has the option to
acquire 100% of the property twelve months after stabilization at 95%
of appraised market value.
"Our mezzanine loan program with InScotia Developments provides a "growth
pipeline" of brand new state of the art facilities for InStorage. In the
interim, we receive interest on our loans, and the option to acquire these new
facilities at a discount to market value when they are fully stabilized.
InScotia has grown quickly and now owns nine self storage properties that are
in various stages of development. InStorage REIT has options to acquire all of
these facilities. The program is working very well." Mr. Tadeson concluded.
InStorage Real Estate Investment Trust
The REIT is an unincorporated open-ended real estate investment trust
that invests primarily in self-storage properties throughout Canada. The REIT
is the largest owner operator of self-storage facilities in Canada and is the
country's leading self-storage industry consolidator, with a current portfolio
of 52 self-storage properties located in Alberta, Saskatchewan, Ontario and
Additional information concerning the REIT may be obtained on the REIT's
website, www.instoragereit.ca, and on the SEDAR website at www.sedar.com,
under the REIT's profile.
This press release contains forward-looking statements. Forward-looking
statements involve known and unknown risks, uncertainties and other factors
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 by the forward-looking statements. Examples of such
statements include: the intention to continue to build the REIT's presence as
the leading consolidator in the Canadian self-storage business; the intention
to roll out the InStorage brand across the REIT's properties during the year;
anticipated demand for the REIT's services; expectations regarding average
rental and occupancy rates; and the REIT's intention to focus on integrating
recent acquisitions. Actual results and developments are likely to differ, and
may differ materially, from those expressed or implied by the forward-looking
statements contained in this press release. Such forward-looking statements
are based on a number of assumptions which may prove to be incorrect,
including, but not limited to: the availability of acquisition opportunities;
interest rate levels and the impact therof on the REIT's debt servicing
obligations; the ability of the REIT to successfully integrate newly acquired
properties or portfolios into its operations and realise the anticipated
benefits of same; the level of activity in the underlying self-storage
business of InStorage, the self-storage industry and in the economy generally;
consumer interest in the services and products of InStorage's subsidiaries;
competition; and anticipated and unanticipated costs. While the REIT
anticipates that subsequent events and developments may cause its views to
change, it specifically disclaims any obligation to update these
forward-looking statements. These forward-looking statements should not be
relied upon as representing the REIT's views as of any date subsequent to the
date of this press release. Although the REIT has attempted to identify
important factors that could cause actual actions, events or results to differ
materially from those described in forward-looking statements, there may be
other factors that cause actions, events or results not to be as anticipated,
estimated or intended. There can be no assurance that forward-looking
statements will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking
The factors identified above are not intended to represent a complete
list of the factors that could affect the REIT. Additional factors are noted
under "Risk and Uncertainties" in the REIT's Management's Discussion and for
the period from January 12, 2006 to December 31, 2006, a copy of which may be
obtained on the SEDAR website at www.sedar.com.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release.
For further information:
For further information: InStorage Real Estate Investment Trust, T.
James Tadeson, Chief Executive Officer, Tel: (416) 867-9705; Alay Shah, Chief
Financial Officer, Tel: (416) 867-9740