TORONTO, June 23, 2016 /CNW/ - Summit Industrial Income REIT ("Summit" or the "REIT") (TSX: SMU.UN) announced today that it is acquiring a 50% interest in a 56,208 square foot light industrial property in the Greater Montreal Region. The property, built in 2000, includes a highly marketable 31 foot clear ceiling height, and was acquired in a non-marketed sale-leaseback transaction. The purchase price for Summit's 50% interest was approximately $3.4 million, generating a capitalization rate of approximately 7.4%. The property is 100% leased to a single tenant with a remaining lease term of 14.8 years with contractual rent escalations equaling a 2.3% annual increase. The purchase price was satisfied by a new 10-year $2.5 million mortgage incurring a 3.38% interest rate, with the balance in cash from the REIT's recently-completed bought-deal equity offering.
Summit purchased the property with its Montreal partner, The Montoni Groupe, one of Montreal's leading property developers. This acquisition will bring the total number of properties in the REIT's Greater Montreal Region portfolio to 16 properties aggregating 816,142 square feet, or 16.7% of the REIT's total portfolio.
"We are pleased to be expanding our presence in Canada's second largest industrial property market," commented Paul Dykeman, Chief Executive Officer. "Fundamentals remain very positive in Montreal with increasing demand, improving vacancies, and growing monthly rents driven primarily by high US demand resulting from the low Canadian dollar, large scale infrastructure projects in the region, and increased capital investment."
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, firstname.lastname@example.org