TORONTO, Sept. 9, 2019 /CNW/ - Summit Industrial Income REIT ("Summit" or the "REIT") (TSX: SMU.UN) announced today that it has waived conditions and will acquire 100% of a brand new Class A light industrial property totaling 121,456 square feet located in the YYC Logistics Centre, an industrial park under development adjacent to the Calgary International Airport on land leased from the Calgary Airport Authority. The developer of the property has a comprehensive development agreement with the Calgary Airport Authority involving a further 38.2 acres of airport land capable of supporting an additional 465,000 square feet of Class A industrial inventory. Summit acquired two properties from the park developer in 2018.
The new building being acquired is 100% leased to two tenants with a weighted average lease term of 4.3 years. 75% of the building is occupied by Fedex Ground. The building has an attractive exterior façade and is extremely functional with a 28-foot clear ceiling height, modern sprinkler systems, an abundance of loading doors, large marshalling areas, ample parking and good circulation.
Summit will pay $15.9 million in cash for the property, funded by its recently completed bought-deal equity offering, generating a stabilized cap rate of 6.25% with a going-in capitalization rate of approximately 7.8% for the first two years due to cost savings on non-recoverable costs. Closing is anticipated on December 2, 2019.
"We are very pleased with the accretive returns we have achieved with our first two acquisitions in this modern and well-located airport logistics center. We expect this new addition will enhance our presence in this strong market and generate strong growth in the years ahead," commented Paul Dykeman, Chief Executive Officer. "We are also exploring the opportunity to participate in the future development of additional properties in the park."
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]