TORONTO, Jan. 13, 2020 /CNW/ - Summit Industrial Income REIT ("Summit" or the "REIT") (TSX: SMU.UN) announced today that it had waived conditions and will acquire 100% of a Class A light industrial property totaling 51,490 square feet, including 11,654 square feet of finished office space, located in Oakville, Ontario in the Greater Toronto Area ("GTA"). The property is situated in an established industrial property node just south of the Ford Assembly Plant with convenient access to the 400 series highways and close to transit. Summit will pay $13.3 million for the property, well below replacement cost, funded by its acquisition credit facility and generating a going-in capitalization rate of approximately 4.7%. Closing is anticipated by the end of January 2020.
The building was constructed in 1996 and includes 24-foot clear ceiling heights and ample truck level doors and parking. It sits on four acres of land with a site coverage of only 30%, thus permitting outside storage and future development potential. The property is occupied by a single light industrial tenant entering the second of a ten-year lease with contractual rent increases that will see rental income grow by 34% over the balance of the lease term. The tenant can expand its leased space by approximately 45,000 square feet in the future to accommodate growth in its business.
"With our significant growth and portfolio diversification in 2019, our focus now is on expanding our presence primarily in the strong and vibrant GTA industrial market. This well-maintained and highly functional GTA asset is another example of how we are acquiring properties at very favorable cap rates with contracted rent growth, and the opportunity to enhance our yield through development and expansion projects on excess land," commented Paul Dykeman, Chief Executive Officer.
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]