TORONTO, March 22, 2017 /CNW/ - Summit Industrial Income REIT ("Summit" or the "REIT") (TSX: SMU.UN) today provided an update on its portfolio growth activities to date in 2017.
The REIT has completed the 100% acquisition of a two-property portfolio totaling 297,620 square feet of Gross Leasable Are ("GLA") located in the Greater Toronto Area close to Pearson International Airport for an aggregate purchase price of approximately $22.5 million. The purchase was funded by cash from its credit lines and an assumed five-year $14.0 million mortgage bearing a fixed interest rate of 3.51%, generating a strong going-in capitalization rate of approximately 6.2%. The two buildings are 100% occupied by a single high quality tenant with a remaining lease term of 11.4 years and including annual contractual rent increases.
The REIT has also waived conditions and will acquire 100% of a portfolio of two single-tenant buildings in the Greater Montreal Region totaling 340,520 square feet of GLA for a purchase price of $16.1 million. The purchase will be funded by cash from the REIT's credit line and a new five-year $10.8 million mortgage with an expected fixed interest rate of approximately 3.00%, generating an anticipated going-in capitalization rate of a solid 7.4% and well below replacement cost. The properties are located close to Pierre Elliot Trudeau Airport and major road and railway transportation lines, and are 100% occupied by two quality tenants with a weighted average lease term of 2.4 years. The acquisition is expected to close on or before March 31, 2017.
Finally, the REIT has arranged financing for the previously disclosed acquisition of a 120,960 square foot property in Calgary Alberta completed in February, 2017 for a purchase price of $17.0 million. A new $11.4 million five-year mortgage on the property has been arranged with a fixed interest rate of 2.97%.
To date in 2017 the REIT has acquired a total of six light industrial properties totaling 1,019,660 square feet of GLA for an aggregate purchase price of approximately $83.8 million, generating a total going-in capitalization rate of a very strong 6.2%. The property purchases so far this year have a weighted average remaining lease term of 8.1 years, and include contractual rent increases, with a purchase price of approximately $82.15 per square foot, well below replacement cost. With the completion of these transactions, the REIT's total property portfolio will grow to 57 properties in key targeted Canadian industrial markets totaling 6.4 million square feet of GLA.
"We have been very active through the first quarter of 2017 in accretively expanding and strengthening our property portfolio in our target Canadian industrial markets," commented Paul Dykeman, Chief Executive Officer. "Looking ahead, our pipeline of potential future acquisitions is very strong, and we look for record growth in 2017 as we capitalize on strong industrial market demand and our proven property management and leasing experience."
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@example.com