TORONTO, July 5, 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 141,628 square foot light industrial property in Calgary, Alberta for a purchase price of approximately $12.675 million, generating a capitalization rate of approximately 7.35%. Located in the Foothills Industrial Park close to major rail and highway transportation links, the single tenant property has had extensive renovations completed in early 2016. The property is fully occupied with a lease running until June 2023. The acquisition will be financed in cash using the REIT's operating credit facility. The REIT has waived conditions on the acquisition and anticipates closing on or before July 15, 2016.
Summit also announced today it has completed the previously-announced purchase of a 309,077 square foot light industrial property in Edmonton, Alberta for a purchase price of approximately $33.0 million, generating a capitalization rate of 6.8%. The acquisition was financed with the assumption of a $23.5 million mortgage maturing in November 2025 bearing an interest rate of 3.85%, with the balance in cash. The property is 100% occupied by a single-tenant with 11 years remaining on its lease term, including contracted rent escalations resulting in 1.4% annual increases.
"We continue to see the Alberta market as a promising region to further Summit's growth," commented Paul Dykeman, Chief Executive Officer. "Calgary and Edmonton present a strong opportunity to generate solid, sustainable and growing cash flows as the Canadian energy industry begins to recover, occupancies increase, and rental rates improve. Our acquisitions here have generated very strong capitalization rates, and we believe these markets will continue to generate significant returns for our Unitholders over the long term."
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: Paul Dykeman, CEO at (902) 405-8813, [email protected]