TORONTO, Aug. 9, 2017 /CNW/ - Summit Industrial Income REIT ("Summit" or the "REIT") (TSX: SMU.UN) announced today that it has waived conditions and will acquire a 116,818 square foot light industrial property well located in Oakville, Ontario. The property, constructed in 2002 and expanded in 2010, is a modern Class A logistics facility located close to major transportation links with 30 foot clear ceiling heights and ample parking. It is 100% occupied by a single tenant with six years remaining on its lease term including 2.0% annual rent escalations. The REIT will pay $15.3 million for the property, financed by proceeds from the REIT's June 2017 equity offering, and expects to close the transaction on or before August 15, 2017.
In addition, the REIT has a 511,848 square foot property under contract and undergoing due diligence in the Greater Montreal Area and two further properties located in the Greater Toronto Area ("GTA") under agreement totaling 388,188 square feet of gross leasable area ("GLA"). One of the GTA properties is 17.5% vacant, offering the REIT the opportunity to add value through its proven leasing programs. The other two properties are 100% occupied. The total purchase price for the three properties is expected to be approximately $78.7 million to be financed with funds from the recent equity offering and the REIT's credit lines. Closing of the three transactions is expected during the third quarter of 2017.
In total, the four properties being acquired have an aggregate remaining lease term of 8.9 years including annual rent increases of approximately 1.4%. The total capitalization rate for the four properties is a very strong 6%. Once completed, the four acquisitions will add over 1.0 million square feet to the REIT's property portfolio, increasing the total portfolio to 64 light industrial properties aggregating 7.4 million square feet of GLA which represents a 42% growth in GLA from 2016.
"We continue to invest the proceeds of our successful June 2017 equity offering in quality income producing properties, and expect to be fully invested by the end of the third quarter of this year," commented Paul Dykeman, Chief Executive Officer. "Looking ahead, our pipeline of additional acquisition opportunities remains strong, and we remain committed to further growth in our key target markets through the balance of the year and going forward."
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]