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VANCOUVER, June 8, 2015 /CNW/ - Pure Industrial Real Estate Trust ("PIRET") (TSX: AAR.UN) today announced that it has entered into a binding agreement with its largest tenant to expand an existing property (the "Barrington Property") in Barrington, New Jersey and that it has successfully secured two mortgage financings on 11 properties for an aggregate total of US$127.9 million.
PIRET acquired the Barrington Property in September, 2014 as part of the U.S. Fedex portfolio acquisition. The tenant currently occupies a 197,649 square feet sorting and distribution facility located in Barrington, New Jersey. The development will comprise a total of 59,600 square feet, which includes expansion of the existing distribution centre, office area and vehicle maintenance & gateway facilities.
PIRET is developing the expansion in partnership with Scannell Properties, which originally constructed the site in 2006. Pending development approvals by applicable government authorities, the tenant is expected to commence occupancy of the expansion premises on April 15, 2016, for a term of ten (10) years. Additionally, the tenant has agreed to extend its existing lease by approximately four (4) years, making it co-terminous with the expansion premises.
The total project cost is estimated to be US$9.1 million, which will be funded with PIRET's existing working capital. The expansion will increase the property's net rent by approximately US$900,000 and will be immediately accretive to the portfolio upon completion.
Kevan Gorrie, President and CEO of PIRET, commented, "This expansion represents the optimal scenario for us, where we can assist in the growth of a valued tenant, do so in an accretive manner and add value for our unitholders."
PIRET obtained first mortgage financings of US$98,800,000 on eight of its FedEx properties located in California, Florida, New Jersey, Illinois and Texas. The mortgages bear interest at 3.80% per annum over a term of seven years. Additionally, PIRET secured a US$29,100,000 mortgage on three properties held in its 51% partnership in North Carolina. The mortgage bears interest at 3.40% per annum over a term of 10 years. The mortgage proceeds will be used to repay short-term bank loans and vendor take-back loans, as well as to pay down PIRET's existing credit facilities and will increase its weighted average mortgage term to 4.8 years.
About Pure Industrial Real Estate Trust
PIRET is an unincorporated, open-ended investment trust that owns and operates a diversified portfolio of income-producing industrial properties in leading markets. PIRET is an internally managed REIT that focuses exclusively on investing in industrial properties.
TSX – AAR.UN
Certain statements contained in this press release may constitute forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "plan", "expect", "may", "will", "intend", "should", and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Forward-looking statements in this news release include that: (i) Pending development approvals by applicable government authorities, the tenant is expected to commence occupancy of the expansion premises on April 15, 2016, for a term of ten (10) years.
Although PIRET believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because PIRET can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the failure to obtain necessary regulatory approvals or satisfy the conditions to complete the development, competitive factors in the industries in which PIRET operates, prevailing economic conditions, and other factors, many of which are beyond the control of the PIRET. The forward-looking statements contained in this press release represent PIRET's expectations as of the date hereof, and are subject to change after such date. PIRET disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required under applicable securities regulations.
THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED NOR APPROVED THE CONTENTS OF THIS PRESS RELEASE AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS PRESS RELEASE.
SOURCE Pure Industrial Real Estate Trust (PIRET)
For further information: Andrew Greig, Director of Investor Relations, Suite 910, 925 West Georgia Street, Vancouver, BC, V6C 3L2, Phone: (604) 398-2836 or (888) 681-5959, E-mail: [email protected]