TORONTO, Nov. 16, 2017 /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 four property light industrial portfolio located in the REIT's key target markets. In total, the portfolio will add 238,783 square feet of space for a total purchase price of approximately $35.0 million. The acquisitions will be financed by new $20.7 million five-year debt with an expected interest rate of 3.33% and the balance in cash from the REIT's operating credit facility, generating a strong going-in capitalization rate of approximately 6.14%. The weighted average lease term for the portfolio is a solid 6.75 years. Closing is expected on or before December 15, 2017.
The portfolio being acquired consists of the following:
- A 41,566 square foot logistics centre in Mississauga, Ontario located close to major transportation links leased to a single tenant under a recently renewed five year lease expiring in 2023. The property is cross-docked with an attractive 20% site coverage to allow ample truck and trailer parking.
- A 119,060 square foot modern distribution facility in Kitchener, Ontario design-built for a single tenant in 2005 with a lease expiring in 2025. The area's strong fundamentals include high tenant retention, low vacancy and strong lease rate inflation.
- A 26,665 square foot light industrial property in Cambridge, Ontario leased to a single tenant under a recently-renewed seven-year lease expiring in 2024. The property is well-located in the City's largest industrial park with historically low vacancy rates and solid lease rate inflation.
- A 51,492 square foot light industrial property in Calgary, Alberta leased to a single tenant occupying the property since its construction in 1998. It is well-positioned in the Foothills Industrial Park with excellent access to major transportation inks.
"With these acquisitions, we will have almost fully invested the proceeds of our June 30, 2017 bought-deal equity offering in quality income producing properties well-located in our key target markets. With the completion of this transaction, our leverage will be approximately 54%, allowing us the flexibility to maintain our track record of accretive growth," commented Paul Dykeman, Chief Executive Officer. "Once completed, our total property portfolio will grow to 69 properties aggregating 7.7 million square feet. Our acquisition pipeline remains robust, and we are confident we will see further growth in the months ahead."
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]