TORONTO, Feb. 10, 2014 /CNW/ - Summit Industrial Income REIT ("Summit II" or the "REIT") (TSX: SMU.UN) today provided an update on recent leasing activities.
501 Palladium Drive, Ottawa
At the REIT's light industrial property located at 501 Palladium Drive in Ottawa, Ontario, management has negotiated a lease buyout payment from its tenant, Smart Technologies Corporation. Smart Technologies is leasing the entire 258,371 square feet in the property under a lease that expires in April 2017, but currently is only occupying the office portion of the building. The REIT has completed the following leasing at the property:
- Leased 64,660 square feet to MobilShred for a ten year term commencing January 1, 2014;
- Leased 106,000 square feet of the space to Lockheed Martin for a ten year term commencing January 1, 2015;
- Leased 46,800 square feet of the space to Lockheed Martin on a future lease commitment that commences May 1, 2017 for a seven and a half year term;
- Negotiated a payment of $4.5 million from Smart Technologies to cover the cost of the temporary vacancy and the cost to re-lease the space. Smart Techonologies will continue to occupy the premises and pay rent until August 2014;
- MobilShred has a right of first offer on the remaining 40,911 square feet of vacant space in the property.
"When we acquired this undervalued property, we were confident we could enhance the asset's value by finding new, credit-worthy and long-term tenants with improved lease covenants. We have now accomplished this objective, an excellent example of how our proven asset and property management programs are creating real value for our Unitholders," stated Paul Dykeman, CEO. "We are also pleased that the lease buyout fee covers the costs related to the temporary vacancies at the property and will contribute toward the cost of re-leasing."
Head Lease Space
Summit also provided today an update on its head lease space. Since the end of the third quarter, the REIT has leased an additional 82,075 square feet of the head lease space. As of February 10, 2014, of the 286,852 square feet of head lease space acquired when the REIT took over management of the property portfolio, 185,604 square feet is now leased and 77,243 square feet is under negotiation. Management expects to lease the remaining 24,005 square feet of head lease space over the near term.
2014 Lease Expiries
Summit REIT has completed most of the 2014 renewals. The REIT has renewed 123,252 square feet of the 168,255 square feet that is set to expire in 2014.
About Summit II
Summit Industrial Income REIT is an unincorporated open-end trust focused on growing and managing a portfolio of light industrial properties across Canada. Summit II's units are listed on the Toronto Stock Exchange 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 II's property portfolio. The forward-looking statements and information are based on certain key expectations and assumptions made by Summit II, including general economic conditions. Although Summit II 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 II 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 II 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 II undertake 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