TORONTO, Aug. 29, 2016 /CNW/ - Summit Industrial Income REIT ("Summit" or the "REIT") (TSX: SMU.UN) announced today that it has entered into an agreement to acquire a 210,727 square foot light industrial property in London, Ontario for a purchase price of approximately $16.6 million, generating a capitalization rate of approximately 7.7%. The property is occupied by a single tenant under very strong covenants with 7.5 years remaining on the lease. Built in 2009, this modern building has numerous features in demand in the London market, including a clear 28 foot ceiling height. The property also includes land available for future potential expansion of approximately 100,000 square feet. The acquisition will be financed with a new $10.4 million seven-year mortgage bearing an interest rate of 3.04%, with the balance in cash using the REIT's operating and acquisition credit line. Closing is anticipated on or before September 20, 2016.
"We are pleased to be expanding our presence in the strong London market, a gateway to the prosperous southwestern Ontario region," commented Paul Dykeman, Chief Executive Officer. "With the completion of this acquisition, we will have fully invested the proceeds from our recent $34.2 million equity offering completed on June 17, 2016. With the funds from this offering, we will have acquired four properties with a strong weighted average lease term of 9.3 years for a total cost of $65.7 million, generating an average capitalization rate of 7.2%."
Summit also announced today it has arranged accretive financing for the recently-completed acquisition of a 141,628 square foot light industrial property in Calgary, Alberta with a new $7.5 million seven-year mortgage bearing an interest rate of 3.15%.
Summit Industrial Income REIT is an unincorporated open-end trust focused on growing and managing a portfolio of light industrial properties across Canada. Summit's units are listed on the TSX and trade under the symbol SMU.UN. For more information, please visit our web site at www.summitIIreit.com.
Caution Regarding Forward Looking Information
This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends", "goal" and similar expressions are intended to identify forward-looking information or statements. More particularly and without limitation, this news release contains forward looking statements and information concerning the goal to build Summit's property portfolio. The forward-looking statements and information are based on certain key expectations and assumptions made by Summit, including general economic conditions. Although Summit believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward looking statements and information because Summit can give no assurance that they will prove to be correct. By its nature, such forward-looking information is subject to various risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed. These risks and uncertainties include, but are not limited to, tenant risks, current economic environment, environmental matters, general insured and uninsured risks and Summit being unable to obtain any required financing and approvals. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date hereof, and to not use such forward looking information for anything other than its intended purpose. Summit undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
SOURCE Summit Industrial Income REIT
For further information: please contact: Paul Dykeman, CEO at (902) 405-8813, [email protected]